Correlation Between Sweetgreen and Drilling Tools
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Drilling Tools 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 Drilling Tools into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Drilling Tools International, you can compare the effects of market volatilities on Sweetgreen and Drilling Tools 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 Drilling Tools. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Drilling Tools.
Diversification Opportunities for Sweetgreen and Drilling Tools
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sweetgreen and Drilling is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Drilling Tools International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Drilling Tools Inter 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 Drilling Tools. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Drilling Tools Inter has no effect on the direction of Sweetgreen i.e., Sweetgreen and Drilling Tools go up and down completely randomly.
Pair Corralation between Sweetgreen and Drilling Tools
Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Drilling Tools. In addition to that, Sweetgreen is 1.2 times more volatile than Drilling Tools International. It trades about -0.1 of its total potential returns per unit of risk. Drilling Tools International is currently generating about -0.08 per unit of volatility. If you would invest 317.00 in Drilling Tools International on December 22, 2024 and sell it today you would lose (53.00) from holding Drilling Tools International or give up 16.72% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sweetgreen vs. Drilling Tools International
Performance |
Timeline |
Sweetgreen |
Drilling Tools Inter |
Sweetgreen and Drilling Tools Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sweetgreen and Drilling Tools
The main advantage of trading using opposite Sweetgreen and Drilling Tools positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Drilling Tools 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 Drilling Tools will offset losses from the drop in Drilling Tools' long position.Sweetgreen vs. Cannae Holdings | Sweetgreen vs. Brinker International | Sweetgreen vs. Jack In The | Sweetgreen vs. Biglari Holdings |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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