Correlation Between United Airlines and Sweetgreen
Can any of the company-specific risk be diversified away by investing in both United Airlines and Sweetgreen 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 United Airlines and Sweetgreen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Airlines Holdings and Sweetgreen, you can compare the effects of market volatilities on United Airlines and Sweetgreen 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 United Airlines with a short position of Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Sweetgreen.
Diversification Opportunities for United Airlines and Sweetgreen
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Sweetgreen is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and United Airlines 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 United Airlines Holdings are associated (or correlated) with Sweetgreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweetgreen has no effect on the direction of United Airlines i.e., United Airlines and Sweetgreen go up and down completely randomly.
Pair Corralation between United Airlines and Sweetgreen
Considering the 90-day investment horizon United Airlines Holdings is expected to generate 0.57 times more return on investment than Sweetgreen. However, United Airlines Holdings is 1.76 times less risky than Sweetgreen. It trades about 0.39 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.15 per unit of risk. If you would invest 7,826 in United Airlines Holdings on September 1, 2024 and sell it today you would earn a total of 1,857 from holding United Airlines Holdings or generate 23.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. Sweetgreen
Performance |
| Timeline |
| United Airlines Holdings |
| Sweetgreen |
United Airlines and Sweetgreen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Sweetgreen
The main advantage of trading using opposite United Airlines and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines position performs unexpectedly, Sweetgreen 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 Sweetgreen will offset losses from the drop in Sweetgreen's long position.| United Airlines vs. American Airlines Group | United Airlines vs. Southwest Airlines | United Airlines vs. JetBlue Airways Corp | United Airlines vs. Delta Air Lines |
| Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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