Correlation Between Sweetgreen and BJs Restaurants

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

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

Diversification Opportunities for Sweetgreen and BJs Restaurants

-0.02

Correlation Coefficient

Sweetgreen  BJs Restaurants

Good diversification

The 3 months correlation between Sweetgreen and BJs is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants 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 BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Sweetgreen i.e., Sweetgreen and BJs Restaurants go up and down completely randomly.

Pair Corralation between Sweetgreen and BJs Restaurants

Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the BJs Restaurants. In addition to that, Sweetgreen is 1.7 times more volatile than BJs Restaurants. It trades about -0.06 of its total potential returns per unit of risk. BJs Restaurants is currently generating about 0.04 per unit of volatility. If you would invest  3,482  in BJs Restaurants on December 28, 2024 and sell it today you would earn a total of  163.00  from holding BJs Restaurants or generate 4.68% return on investment over 90 days.

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

Sweetgreen  vs.  BJs Restaurants

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.

BJs Restaurants

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, BJs Restaurants may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sweetgreen and BJs Restaurants

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

The idea behind Sweetgreen and BJs Restaurants 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.