Correlation Between Sweetgreen and Churchill Downs
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Churchill Downs 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 Churchill Downs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Churchill Downs Incorporated, you can compare the effects of market volatilities on Sweetgreen and Churchill Downs 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 Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Churchill Downs.
Diversification Opportunities for Sweetgreen and Churchill Downs
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sweetgreen and Churchill is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs 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 Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of Sweetgreen i.e., Sweetgreen and Churchill Downs go up and down completely randomly.
Pair Corralation between Sweetgreen and Churchill Downs
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 2.85 times more return on investment than Churchill Downs. However, Sweetgreen is 2.85 times more volatile than Churchill Downs Incorporated. It trades about 0.08 of its potential returns per unit of risk. Churchill Downs Incorporated is currently generating about 0.03 per unit of risk. If you would invest 850.00 in Sweetgreen on September 26, 2024 and sell it today you would earn a total of 2,481 from holding Sweetgreen or generate 291.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sweetgreen vs. Churchill Downs Incorporated
Performance |
Timeline |
Sweetgreen |
Churchill Downs |
Sweetgreen and Churchill Downs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sweetgreen and Churchill Downs
The main advantage of trading using opposite Sweetgreen and Churchill Downs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Churchill Downs 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 Churchill Downs will offset losses from the drop in Churchill Downs' long position.Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
Churchill Downs vs. Accel Entertainment | Churchill Downs vs. PlayAGS | Churchill Downs vs. International Game Technology | Churchill Downs vs. Everi Holdings |
Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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