Correlation Between Royalty Management and Sweetgreen

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

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

Diversification Opportunities for Royalty Management and Sweetgreen

-0.06

Correlation Coefficient

Royalty Management  Sweetgreen

Good diversification

The 3 months correlation between Royalty and Sweetgreen is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Royalty Management Holding and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Royalty Management 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 Royalty Management 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 Royalty Management i.e., Royalty Management and Sweetgreen go up and down completely randomly.

Pair Corralation between Royalty Management and Sweetgreen

Given the investment horizon of 90 days Royalty Management Holding is expected to under-perform the Sweetgreen. In addition to that, Royalty Management is 1.3 times more volatile than Sweetgreen. It trades about -0.04 of its total potential returns per unit of risk. Sweetgreen is currently generating about 0.07 per unit of volatility. If you would invest  973.00  in Sweetgreen on October 12, 2024 and sell it today you would earn a total of  2,337  from holding Sweetgreen or generate 240.18% return on investment over 90 days.

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

Royalty Management Holding  vs.  Sweetgreen

Royalty Management

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Royalty Management Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Royalty Management may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 fragile 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 Royalty Management and Sweetgreen

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

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.