Correlation Between Sweetgreen and Hesai Group

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

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

Diversification Opportunities for Sweetgreen and Hesai Group

-0.43

Correlation Coefficient

Sweetgreen  Hesai Group

Very good diversification

The 3 months correlation between Sweetgreen and Hesai is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Sweetgreen i.e., Sweetgreen and Hesai Group go up and down completely randomly.

Pair Corralation between Sweetgreen and Hesai Group

Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Hesai Group. But the stock apears to be less risky and, when comparing its historical volatility, Sweetgreen is 2.5 times less risky than Hesai Group. The stock trades about -0.05 of its potential returns per unit of risk. The Hesai Group American is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  447.00  in Hesai Group American on October 9, 2024 and sell it today you would earn a total of  1,029  from holding Hesai Group American or generate 230.2% return on investment over 90 days.

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

Sweetgreen  vs.  Hesai Group American

Sweetgreen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sweetgreen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Sweetgreen is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Hesai Group American

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hesai Group American are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Hesai Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sweetgreen and Hesai Group

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

The idea behind Sweetgreen and Hesai Group American 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.