Correlation Between Sweetgreen and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Summit Hotel 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 Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Summit Hotel Properties, you can compare the effects of market volatilities on Sweetgreen and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Summit Hotel.
Diversification Opportunities for Sweetgreen and Summit Hotel
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sweetgreen and Summit is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Sweetgreen i.e., Sweetgreen and Summit Hotel go up and down completely randomly.
Pair Corralation between Sweetgreen and Summit Hotel
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.09 times more return on investment than Summit Hotel. However, Sweetgreen is 2.09 times more volatile than Summit Hotel Properties. It trades about 0.18 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.07 per unit of risk. If you would invest 3,662 in Sweetgreen on August 25, 2024 and sell it today you would earn a total of 678.00 from holding Sweetgreen or generate 18.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Summit Hotel Properties
Performance |
| Timeline |
| Sweetgreen |
| Summit Hotel Properties |
Sweetgreen and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Summit Hotel
The main advantage of trading using opposite Sweetgreen and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. Ryman Hospitality Properties | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Host Hotels Resorts |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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