Correlation Between Sweetgreen and Emerson Radio
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Emerson Radio 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 Emerson Radio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Emerson Radio, you can compare the effects of market volatilities on Sweetgreen and Emerson Radio 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 Emerson Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Emerson Radio.
Diversification Opportunities for Sweetgreen and Emerson Radio
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sweetgreen and Emerson is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Emerson Radio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Radio 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 Emerson Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Radio has no effect on the direction of Sweetgreen i.e., Sweetgreen and Emerson Radio go up and down completely randomly.
Pair Corralation between Sweetgreen and Emerson Radio
Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Emerson Radio. In addition to that, Sweetgreen is 1.03 times more volatile than Emerson Radio. It trades about -0.24 of its total potential returns per unit of risk. Emerson Radio is currently generating about -0.04 per unit of volatility. If you would invest 49.00 in Emerson Radio on November 28, 2024 and sell it today you would lose (3.00) from holding Emerson Radio or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Emerson Radio
Performance |
| Timeline |
| Sweetgreen |
| Emerson Radio |
Sweetgreen and Emerson Radio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Emerson Radio
The main advantage of trading using opposite Sweetgreen and Emerson Radio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Emerson Radio 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 Emerson Radio will offset losses from the drop in Emerson Radio's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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