Correlation Between Sweetgreen and Telix Pharmaceuticals

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

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

Diversification Opportunities for Sweetgreen and Telix Pharmaceuticals

0.05

Correlation Coefficient

Sweetgreen  Telix Pharmaceuticals

Significant diversification

The 3 months correlation between Sweetgreen and Telix is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Telix Pharmaceuticals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telix Pharmaceuticals 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 Telix Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telix Pharmaceuticals has no effect on the direction of Sweetgreen i.e., Sweetgreen and Telix Pharmaceuticals go up and down completely randomly.

Pair Corralation between Sweetgreen and Telix Pharmaceuticals

Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Telix Pharmaceuticals. In addition to that, Sweetgreen is 1.42 times more volatile than Telix Pharmaceuticals Limited. It trades about -0.17 of its total potential returns per unit of risk. Telix Pharmaceuticals Limited is currently generating about -0.18 per unit of volatility. If you would invest  1,637  in Telix Pharmaceuticals Limited on October 8, 2024 and sell it today you would lose (144.00) from holding Telix Pharmaceuticals Limited or give up 8.8% of portfolio value over 90 days.

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

Sweetgreen  vs.  Telix Pharmaceuticals Limited

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 latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Telix Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telix Pharmaceuticals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Telix Pharmaceuticals is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sweetgreen and Telix Pharmaceuticals

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

The idea behind Sweetgreen and Telix Pharmaceuticals Limited 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.