Correlation Between Sweetgreen and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Xponential Fitness 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 Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Xponential Fitness, you can compare the effects of market volatilities on Sweetgreen and Xponential Fitness 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 Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Xponential Fitness.
Diversification Opportunities for Sweetgreen and Xponential Fitness
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sweetgreen and Xponential is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness 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 Xponential Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xponential Fitness has no effect on the direction of Sweetgreen i.e., Sweetgreen and Xponential Fitness go up and down completely randomly.
Pair Corralation between Sweetgreen and Xponential Fitness
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 1.96 times less return on investment than Xponential Fitness. But when comparing it to its historical volatility, Sweetgreen is 1.49 times less risky than Xponential Fitness. It trades about 0.11 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,259 in Xponential Fitness on August 30, 2024 and sell it today you would earn a total of 262.00 from holding Xponential Fitness or generate 20.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweetgreen vs. Xponential Fitness
Performance |
| Timeline |
| Sweetgreen |
| Xponential Fitness |
Sweetgreen and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweetgreen and Xponential Fitness
The main advantage of trading using opposite Sweetgreen and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Xponential Fitness 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 Xponential Fitness will offset losses from the drop in Xponential Fitness' long position.| Sweetgreen vs. Chipotle Mexican Grill | Sweetgreen vs. Yum Brands | Sweetgreen vs. The Wendys Co | Sweetgreen vs. McDonalds |
| Xponential Fitness vs. Chipotle Mexican Grill | Xponential Fitness vs. Yum Brands | Xponential Fitness vs. The Wendys Co | Xponential Fitness vs. McDonalds |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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