Correlation Between Sweetgreen and Seadrill
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Seadrill 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 Seadrill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Seadrill Limited, you can compare the effects of market volatilities on Sweetgreen and Seadrill 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 Seadrill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Seadrill.
Diversification Opportunities for Sweetgreen and Seadrill
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sweetgreen and Seadrill is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Seadrill Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seadrill Limited 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 Seadrill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seadrill Limited has no effect on the direction of Sweetgreen i.e., Sweetgreen and Seadrill go up and down completely randomly.
Pair Corralation between Sweetgreen and Seadrill
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.32 times more return on investment than Seadrill. However, Sweetgreen is 2.32 times more volatile than Seadrill Limited. It trades about 0.11 of its potential returns per unit of risk. Seadrill Limited is currently generating about 0.0 per unit of risk. If you would invest 1,149 in Sweetgreen on September 4, 2024 and sell it today you would earn a total of 2,774 from holding Sweetgreen or generate 241.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Seadrill Limited
Performance |
| Timeline |
| Sweetgreen |
| Seadrill Limited |
Sweetgreen and Seadrill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Seadrill
The main advantage of trading using opposite Sweetgreen and Seadrill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Seadrill 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 Seadrill will offset losses from the drop in Seadrill's long position.| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
| Seadrill vs. Nabors Industries | Seadrill vs. Precision Drilling | Seadrill vs. Sable Offshore Corp | Seadrill vs. Patterson UTI Energy |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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