Correlation Between Sweetgreen and Marriott International

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

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

Diversification Opportunities for Sweetgreen and Marriott International

0.45

Correlation Coefficient

Sweetgreen  Marriott International

Very weak diversification

The 3 months correlation between Sweetgreen and Marriott is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott 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 Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of Sweetgreen i.e., Sweetgreen and Marriott International go up and down completely randomly.

Pair Corralation between Sweetgreen and Marriott International

Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Marriott International. In addition to that, Sweetgreen is 2.24 times more volatile than Marriott International. It trades about -0.07 of its total potential returns per unit of risk. Marriott International is currently generating about -0.14 per unit of volatility. If you would invest  27,968  in Marriott International on December 30, 2024 and sell it today you would lose (4,267) from holding Marriott International or give up 15.26% of portfolio value over 90 days.

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

Sweetgreen  vs.  Marriott International

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.

Marriott International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marriott International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Sweetgreen and Marriott International

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

The idea behind Sweetgreen and Marriott International 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.