Correlation Between Coda Octopus and Sweetgreen

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

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

Diversification Opportunities for Coda Octopus and Sweetgreen

0.62

Correlation Coefficient

Coda Octopus  Sweetgreen

Poor diversification

The 3 months correlation between Coda and Sweetgreen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Coda Octopus 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 Coda Octopus Group 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 Coda Octopus i.e., Coda Octopus and Sweetgreen go up and down completely randomly.

Pair Corralation between Coda Octopus and Sweetgreen

Given the investment horizon of 90 days Coda Octopus Group is expected to generate 0.6 times more return on investment than Sweetgreen. However, Coda Octopus Group is 1.68 times less risky than Sweetgreen. It trades about -0.22 of its potential returns per unit of risk. Sweetgreen is currently generating about -0.21 per unit of risk. If you would invest  932.00  in Coda Octopus Group on September 23, 2024 and sell it today you would lose (109.00) from holding Coda Octopus Group or give up 11.7% of portfolio value over 90 days.

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

Coda Octopus Group  vs.  Sweetgreen

Coda Octopus Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Coda Octopus sustained solid returns over the last few months and may actually be approaching a breakup point.

Sweetgreen

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sweetgreen are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Sweetgreen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Coda Octopus and Sweetgreen

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

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.