Correlation Between Sweetgreen and World Oil
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and World Oil 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 World Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and World Oil Group, you can compare the effects of market volatilities on Sweetgreen and World Oil 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 World Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and World Oil.
Diversification Opportunities for Sweetgreen and World Oil
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sweetgreen and World is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and World Oil Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Oil Group 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 World Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Oil Group has no effect on the direction of Sweetgreen i.e., Sweetgreen and World Oil go up and down completely randomly.
Pair Corralation between Sweetgreen and World Oil
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 1.29 times less return on investment than World Oil. But when comparing it to its historical volatility, Sweetgreen is 2.12 times less risky than World Oil. It trades about 0.08 of its potential returns per unit of risk. World Oil Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.36 in World Oil Group on September 12, 2024 and sell it today you would lose (0.33) from holding World Oil Group or give up 13.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Sweetgreen vs. World Oil Group
Performance |
| Timeline |
| Sweetgreen |
| World Oil Group |
Sweetgreen and World Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and World Oil
The main advantage of trading using opposite Sweetgreen and World Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, World Oil 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 World Oil will offset losses from the drop in World Oil's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| World Oil vs. NH Foods Ltd | World Oil vs. Sligro Food Group | World Oil vs. Sweetgreen | World Oil vs. BBB 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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