Correlation Between Sweetgreen and Accel Entertainment

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

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

Diversification Opportunities for Sweetgreen and Accel Entertainment

0.16

Correlation Coefficient

Sweetgreen  Accel Entertainment

Average diversification

The 3 months correlation between Sweetgreen and Accel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Accel Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Entertainment and Sweetgreen 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 Sweetgreen are associated (or correlated) with Accel Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Entertainment has no effect on the direction of Sweetgreen i.e., Sweetgreen and Accel Entertainment go up and down completely randomly.

Pair Corralation between Sweetgreen and Accel Entertainment

Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.96 times more return on investment than Accel Entertainment. However, Sweetgreen is 2.96 times more volatile than Accel Entertainment. It trades about 0.14 of its potential returns per unit of risk. Accel Entertainment is currently generating about 0.03 per unit of risk. If you would invest  2,845  in Sweetgreen on September 5, 2024 and sell it today you would earn a total of  1,008  from holding Sweetgreen or generate 35.43% return on investment over 90 days.

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

Sweetgreen  vs.  Accel Entertainment

Sweetgreen

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sweetgreen are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Sweetgreen reported solid returns over the last few months and may actually be approaching a breakup point.

Accel Entertainment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accel Entertainment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Accel Entertainment is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sweetgreen and Accel Entertainment

The main advantage of trading using opposite Sweetgreen and Accel Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Accel Entertainment 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 Accel Entertainment will offset losses from the drop in Accel Entertainment's long position.

The idea behind Sweetgreen and Accel Entertainment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.