Correlation Between Sweetgreen and Eltek

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

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

Diversification Opportunities for Sweetgreen and Eltek

0.22

Correlation Coefficient

Sweetgreen  Eltek

Modest diversification

The 3 months correlation between Sweetgreen and Eltek is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eltek 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 Eltek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eltek has no effect on the direction of Sweetgreen i.e., Sweetgreen and Eltek go up and down completely randomly.

Pair Corralation between Sweetgreen and Eltek

Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Eltek. In addition to that, Sweetgreen is 1.28 times more volatile than Eltek. It trades about -0.21 of its total potential returns per unit of risk. Eltek is currently generating about -0.01 per unit of volatility. If you would invest  1,105  in Eltek on September 23, 2024 and sell it today you would lose (24.00) from holding Eltek or give up 2.17% of portfolio value over 90 days.

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

Sweetgreen  vs.  Eltek

Sweetgreen

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sweetgreen are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Sweetgreen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Eltek

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eltek are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Eltek is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sweetgreen and Eltek

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

The idea behind Sweetgreen and Eltek 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 Commodity Directory module to find actively traded commodities issued by global exchanges.