Correlation Between Sweetgreen and HR Block
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and HR Block at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sweetgreen and HR Block into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and HR Block, you can compare the effects of market volatilities on Sweetgreen and HR Block and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sweetgreen with a short position of HR Block. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and HR Block.
Diversification Opportunities for Sweetgreen and HR Block
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sweetgreen and HRB is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and HR Block in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HR Block and Sweetgreen is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sweetgreen are associated (or correlated) with HR Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HR Block has no effect on the direction of Sweetgreen i.e., Sweetgreen and HR Block go up and down completely randomly.
Pair Corralation between Sweetgreen and HR Block
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 1.72 times more return on investment than HR Block. However, Sweetgreen is 1.72 times more volatile than HR Block. It trades about 0.16 of its potential returns per unit of risk. HR Block is currently generating about -0.04 per unit of risk. If you would invest 3,748 in Sweetgreen on August 26, 2024 and sell it today you would earn a total of 592.00 from holding Sweetgreen or generate 15.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. HR Block
Performance |
| Timeline |
| Sweetgreen |
| HR Block |
Sweetgreen and HR Block Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and HR Block
The main advantage of trading using opposite Sweetgreen and HR Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, HR Block can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HR Block will offset losses from the drop in HR Block's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| HR Block vs. Bright Horizons Family | HR Block vs. Smart Share Global | HR Block vs. Mister Car Wash | HR Block vs. Carriage Services |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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