Correlation Between Sweetgreen and Royal Caribbean
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Royal Caribbean 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 Royal Caribbean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Royal Caribbean Cruises, you can compare the effects of market volatilities on Sweetgreen and Royal Caribbean 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 Royal Caribbean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Royal Caribbean.
Diversification Opportunities for Sweetgreen and Royal Caribbean
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sweetgreen and Royal is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Royal Caribbean Cruises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Caribbean Cruises 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 Royal Caribbean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Caribbean Cruises has no effect on the direction of Sweetgreen i.e., Sweetgreen and Royal Caribbean go up and down completely randomly.
Pair Corralation between Sweetgreen and Royal Caribbean
Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Royal Caribbean. In addition to that, Sweetgreen is 1.35 times more volatile than Royal Caribbean Cruises. It trades about -0.21 of its total potential returns per unit of risk. Royal Caribbean Cruises is currently generating about 0.14 per unit of volatility. If you would invest 24,181 in Royal Caribbean Cruises on November 18, 2024 and sell it today you would earn a total of 2,128 from holding Royal Caribbean Cruises or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Royal Caribbean Cruises
Performance |
| Timeline |
| Sweetgreen |
| Royal Caribbean Cruises |
Sweetgreen and Royal Caribbean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Royal Caribbean
The main advantage of trading using opposite Sweetgreen and Royal Caribbean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Royal Caribbean 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 Royal Caribbean will offset losses from the drop in Royal Caribbean's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Royal Caribbean vs. Carnival | Royal Caribbean vs. Airbnb Inc | Royal Caribbean vs. Expedia Group | Royal Caribbean vs. Booking Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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