Correlation Between Sweetgreen and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and KeyCorp 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 KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and KeyCorp, you can compare the effects of market volatilities on Sweetgreen and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and KeyCorp.
Diversification Opportunities for Sweetgreen and KeyCorp
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sweetgreen and KeyCorp is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Sweetgreen i.e., Sweetgreen and KeyCorp go up and down completely randomly.
Pair Corralation between Sweetgreen and KeyCorp
Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the KeyCorp. In addition to that, Sweetgreen is 5.96 times more volatile than KeyCorp. It trades about -0.04 of its total potential returns per unit of risk. KeyCorp is currently generating about -0.1 per unit of volatility. If you would invest 2,477 in KeyCorp on September 12, 2024 and sell it today you would lose (46.00) from holding KeyCorp or give up 1.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. KeyCorp
Performance |
| Timeline |
| Sweetgreen |
| KeyCorp |
Sweetgreen and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and KeyCorp
The main advantage of trading using opposite Sweetgreen and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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