Correlation Between Sweetgreen and UTime

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

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

Diversification Opportunities for Sweetgreen and UTime

0.68

Correlation Coefficient

Sweetgreen  UTime

Poor diversification

The 3 months correlation between Sweetgreen and UTime is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and UTime Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTime Limited 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 UTime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTime Limited has no effect on the direction of Sweetgreen i.e., Sweetgreen and UTime go up and down completely randomly.

Pair Corralation between Sweetgreen and UTime

Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 0.59 times more return on investment than UTime. However, Sweetgreen is 1.69 times less risky than UTime. It trades about -0.06 of its potential returns per unit of risk. UTime Limited is currently generating about -0.12 per unit of risk. If you would invest  3,170  in Sweetgreen on December 28, 2024 and sell it today you would lose (517.00) from holding Sweetgreen or give up 16.31% of portfolio value over 90 days.

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

Sweetgreen  vs.  UTime Limited

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.

UTime Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days UTime Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Sweetgreen and UTime

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

The idea behind Sweetgreen and UTime 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.