Correlation Between Sweetgreen and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Lifevantage 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 Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Lifevantage, you can compare the effects of market volatilities on Sweetgreen and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Lifevantage.
Diversification Opportunities for Sweetgreen and Lifevantage
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sweetgreen and Lifevantage is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Sweetgreen i.e., Sweetgreen and Lifevantage go up and down completely randomly.
Pair Corralation between Sweetgreen and Lifevantage
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 1.7 times less return on investment than Lifevantage. In addition to that, Sweetgreen is 1.14 times more volatile than Lifevantage. It trades about 0.07 of its total potential returns per unit of risk. Lifevantage is currently generating about 0.13 per unit of volatility. If you would invest 787.00 in Lifevantage on September 1, 2024 and sell it today you would earn a total of 674.00 from holding Lifevantage or generate 85.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Lifevantage
Performance |
| Timeline |
| Sweetgreen |
| Lifevantage |
Sweetgreen and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Lifevantage
The main advantage of trading using opposite Sweetgreen and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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