Correlation Between Sweetgreen and Light Wonder
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Light Wonder 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 Light Wonder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Light Wonder, you can compare the effects of market volatilities on Sweetgreen and Light Wonder 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 Light Wonder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Light Wonder.
Diversification Opportunities for Sweetgreen and Light Wonder
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sweetgreen and Light is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Light Wonder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Wonder 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 Light Wonder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Wonder has no effect on the direction of Sweetgreen i.e., Sweetgreen and Light Wonder go up and down completely randomly.
Pair Corralation between Sweetgreen and Light Wonder
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.23 times more return on investment than Light Wonder. However, Sweetgreen is 2.23 times more volatile than Light Wonder. It trades about 0.08 of its potential returns per unit of risk. Light Wonder is currently generating about 0.05 per unit of risk. If you would invest 1,011 in Sweetgreen on September 5, 2024 and sell it today you would earn a total of 2,842 from holding Sweetgreen or generate 281.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Light Wonder
Performance |
| Timeline |
| Sweetgreen |
| Light Wonder |
Sweetgreen and Light Wonder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Light Wonder
The main advantage of trading using opposite Sweetgreen and Light Wonder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Light Wonder 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 Light Wonder will offset losses from the drop in Light Wonder's long position.| Sweetgreen vs. Hyatt Hotels | Sweetgreen vs. Smart Share Global | Sweetgreen vs. Wyndham Hotels Resorts | Sweetgreen vs. WW International |
| Light Wonder vs. Codere Online Corp | Light Wonder vs. Inspired Entertainment | Light Wonder vs. International Game Technology | Light Wonder vs. Accel Entertainment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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