Correlation Between Transgene and Sweetgreen

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

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

Diversification Opportunities for Transgene and Sweetgreen

0.0

Correlation Coefficient

Transgene  Sweetgreen

Pay attention - limited upside

The 3 months correlation between Transgene and Sweetgreen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Transgene SA and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Transgene 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 Transgene SA are associated (or correlated) with Sweetgreen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sweetgreen has no effect on the direction of Transgene i.e., Transgene and Sweetgreen go up and down completely randomly.

Pair Corralation between Transgene and Sweetgreen

Assuming the 90 days horizon Transgene SA is expected to generate 9.52 times more return on investment than Sweetgreen. However, Transgene is 9.52 times more volatile than Sweetgreen. It trades about 0.04 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.06 per unit of risk. If you would invest  1.00  in Transgene SA on October 25, 2024 and sell it today you would earn a total of  158.00  from holding Transgene SA or generate 15800.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Transgene SA  vs.  Sweetgreen

Transgene SA

Risk-Adjusted Performance

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Very Weak

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

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 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Transgene and Sweetgreen

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

The idea behind Transgene SA and Sweetgreen 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 Channel module to use Commodity Channel Index to analyze current equity momentum.