Correlation Between Sweetgreen and RCI Hospitality
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and RCI Hospitality 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 RCI Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and RCI Hospitality Holdings, you can compare the effects of market volatilities on Sweetgreen and RCI Hospitality 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 RCI Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and RCI Hospitality.
Diversification Opportunities for Sweetgreen and RCI Hospitality
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sweetgreen and RCI is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and RCI Hospitality Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCI Hospitality Holdings 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 RCI Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCI Hospitality Holdings has no effect on the direction of Sweetgreen i.e., Sweetgreen and RCI Hospitality go up and down completely randomly.
Pair Corralation between Sweetgreen and RCI Hospitality
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.08 times more return on investment than RCI Hospitality. However, Sweetgreen is 2.08 times more volatile than RCI Hospitality Holdings. It trades about 0.08 of its potential returns per unit of risk. RCI Hospitality Holdings is currently generating about -0.03 per unit of risk. If you would invest 1,123 in Sweetgreen on August 28, 2024 and sell it today you would earn a total of 3,274 from holding Sweetgreen or generate 291.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. RCI Hospitality Holdings
Performance |
| Timeline |
| Sweetgreen |
| RCI Hospitality Holdings |
Sweetgreen and RCI Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and RCI Hospitality
The main advantage of trading using opposite Sweetgreen and RCI Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, RCI Hospitality 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 RCI Hospitality will offset losses from the drop in RCI Hospitality's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| RCI Hospitality vs. Brinker International | RCI Hospitality vs. Bloomin Brands | RCI Hospitality vs. BJs Restaurants | RCI Hospitality vs. Dennys Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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