Correlation Between Sweetgreen and Potbelly
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Potbelly 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 Potbelly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Potbelly Co, you can compare the effects of market volatilities on Sweetgreen and Potbelly 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 Potbelly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Potbelly.
Diversification Opportunities for Sweetgreen and Potbelly
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sweetgreen and Potbelly is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Potbelly Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Potbelly 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 Potbelly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Potbelly has no effect on the direction of Sweetgreen i.e., Sweetgreen and Potbelly go up and down completely randomly.
Pair Corralation between Sweetgreen and Potbelly
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 10.08 times less return on investment than Potbelly. But when comparing it to its historical volatility, Sweetgreen is 1.11 times less risky than Potbelly. It trades about 0.03 of its potential returns per unit of risk. Potbelly Co is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 749.00 in Potbelly Co on September 5, 2024 and sell it today you would earn a total of 285.00 from holding Potbelly Co or generate 38.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Potbelly Co
Performance |
| Timeline |
| Sweetgreen |
| Potbelly |
Sweetgreen and Potbelly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Potbelly
The main advantage of trading using opposite Sweetgreen and Potbelly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Potbelly 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 Potbelly will offset losses from the drop in Potbelly's long position.| Sweetgreen vs. Hyatt Hotels | Sweetgreen vs. Smart Share Global | Sweetgreen vs. Wyndham Hotels Resorts | Sweetgreen vs. WW International |
| Potbelly vs. FAT Brands | Potbelly vs. BJs Restaurants | Potbelly vs. One Group Hospitality | Potbelly vs. El Pollo Loco |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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