Correlation Between Sweetgreen and Chanson International

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

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

Diversification Opportunities for Sweetgreen and Chanson International

0.76

Correlation Coefficient

Sweetgreen  Chanson International

Poor diversification

The 3 months correlation between Sweetgreen and Chanson is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Chanson International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chanson International 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 Chanson International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chanson International has no effect on the direction of Sweetgreen i.e., Sweetgreen and Chanson International go up and down completely randomly.

Pair Corralation between Sweetgreen and Chanson International

Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 0.29 times more return on investment than Chanson International. However, Sweetgreen is 3.44 times less risky than Chanson International. It trades about -0.11 of its potential returns per unit of risk. Chanson International Holding is currently generating about -0.21 per unit of risk. If you would invest  3,313  in Sweetgreen on December 21, 2024 and sell it today you would lose (870.00) from holding Sweetgreen or give up 26.26% of portfolio value over 90 days.

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

Sweetgreen  vs.  Chanson International Holding

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.

Chanson International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chanson International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Sweetgreen and Chanson International

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

The idea behind Sweetgreen and Chanson International Holding 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.