Correlation Between Chanson International and Sweetgreen

Can any of the company-specific risk be diversified away by investing in both Chanson International 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 Chanson International and Sweetgreen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chanson International Holding and Sweetgreen, you can compare the effects of market volatilities on Chanson International 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 Chanson International with a short position of Sweetgreen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chanson International and Sweetgreen.

Diversification Opportunities for Chanson International and Sweetgreen

0.29

Correlation Coefficient

Chanson International  Sweetgreen

Modest diversification

The 3 months correlation between Chanson and Sweetgreen is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Chanson International Holding and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Chanson International 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 Chanson International Holding 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 Chanson International i.e., Chanson International and Sweetgreen go up and down completely randomly.

Pair Corralation between Chanson International and Sweetgreen

Given the investment horizon of 90 days Chanson International Holding is expected to under-perform the Sweetgreen. In addition to that, Chanson International is 2.27 times more volatile than Sweetgreen. It trades about -0.09 of its total potential returns per unit of risk. Sweetgreen is currently generating about -0.03 per unit of volatility. If you would invest  3,637  in Sweetgreen on October 10, 2024 and sell it today you would lose (443.00) from holding Sweetgreen or give up 12.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Chanson International Holding  vs.  Sweetgreen

Chanson International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chanson International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sweetgreen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sweetgreen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Chanson International and Sweetgreen

The main advantage of trading using opposite Chanson International and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chanson International 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.

The idea behind Chanson International Holding and Sweetgreen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.