Correlation Between Sweetgreen and Iris Energy
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Iris Energy 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 Iris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Iris Energy, you can compare the effects of market volatilities on Sweetgreen and Iris Energy 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 Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Iris Energy.
Diversification Opportunities for Sweetgreen and Iris Energy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sweetgreen and Iris is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy 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 Iris Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iris Energy has no effect on the direction of Sweetgreen i.e., Sweetgreen and Iris Energy go up and down completely randomly.
Pair Corralation between Sweetgreen and Iris Energy
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 0.63 times more return on investment than Iris Energy. However, Sweetgreen is 1.59 times less risky than Iris Energy. It trades about -0.04 of its potential returns per unit of risk. Iris Energy is currently generating about -0.14 per unit of risk. If you would invest 3,446 in Sweetgreen on October 14, 2024 and sell it today you would lose (136.00) from holding Sweetgreen or give up 3.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Iris Energy
Performance |
| Timeline |
| Sweetgreen |
| Iris Energy |
Sweetgreen and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Iris Energy
The main advantage of trading using opposite Sweetgreen and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Iris Energy 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 Iris Energy will offset losses from the drop in Iris Energy's long position.| Sweetgreen vs. Chipotle Mexican Grill | Sweetgreen vs. Yum Brands | Sweetgreen vs. The Wendys Co | Sweetgreen vs. Wingstop |
| Iris Energy vs. Pembina Pipeline | Iris Energy vs. Goosehead Insurance | Iris Energy vs. Pekin Life Insurance | Iris Energy vs. Bowhead Specialty Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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