Correlation Between Nathans Famous and Sweetgreen

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

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

Diversification Opportunities for Nathans Famous and Sweetgreen

-0.85

Correlation Coefficient

Nathans Famous  Sweetgreen

Pay attention - limited upside

The 3 months correlation between Nathans and Sweetgreen is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nathans Famous and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Nathans Famous 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 Nathans Famous 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 Nathans Famous i.e., Nathans Famous and Sweetgreen go up and down completely randomly.

Pair Corralation between Nathans Famous and Sweetgreen

Given the investment horizon of 90 days Nathans Famous is expected to generate 0.63 times more return on investment than Sweetgreen. However, Nathans Famous is 1.58 times less risky than Sweetgreen. It trades about 0.12 of its potential returns per unit of risk. Sweetgreen is currently generating about -0.11 per unit of risk. If you would invest  7,938  in Nathans Famous on December 21, 2024 and sell it today you would earn a total of  1,317  from holding Nathans Famous or generate 16.59% return on investment over 90 days.

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

Nathans Famous  vs.  Sweetgreen

Nathans Famous

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nathans Famous are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Nathans Famous demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Sweetgreen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sweetgreen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nathans Famous and Sweetgreen

The main advantage of trading using opposite Nathans Famous and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nathans Famous 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 Nathans Famous 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 Stocks Directory module to find actively traded stocks across global markets.