Correlation Between Sweetgreen and Bilibili

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

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

Diversification Opportunities for Sweetgreen and Bilibili

-0.65

Correlation Coefficient

Sweetgreen  Bilibili

Excellent diversification

The 3 months correlation between Sweetgreen and Bilibili is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili 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 Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Sweetgreen i.e., Sweetgreen and Bilibili go up and down completely randomly.

Pair Corralation between Sweetgreen and Bilibili

Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Bilibili. But the stock apears to be less risky and, when comparing its historical volatility, Sweetgreen is 1.08 times less risky than Bilibili. The stock trades about -0.13 of its potential returns per unit of risk. The Bilibili is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,959  in Bilibili on December 20, 2024 and sell it today you would earn a total of  56.00  from holding Bilibili or generate 2.86% return on investment over 90 days.

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

Sweetgreen  vs.  Bilibili

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.

Bilibili

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bilibili are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak essential indicators, Bilibili may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sweetgreen and Bilibili

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

The idea behind Sweetgreen and Bilibili 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 CEOs Directory module to screen CEOs from public companies around the world.