Correlation Between ANTA Sports and Sweetgreen

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

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

Diversification Opportunities for ANTA Sports and Sweetgreen

-0.09

Correlation Coefficient

ANTA Sports  Sweetgreen

Good diversification

The 3 months correlation between ANTA and Sweetgreen is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding ANTA Sports Products and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and ANTA Sports 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 ANTA Sports Products 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 ANTA Sports i.e., ANTA Sports and Sweetgreen go up and down completely randomly.

Pair Corralation between ANTA Sports and Sweetgreen

Assuming the 90 days horizon ANTA Sports Products is expected to generate 1.08 times more return on investment than Sweetgreen. However, ANTA Sports is 1.08 times more volatile than Sweetgreen. It trades about 0.08 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.06 per unit of risk. If you would invest  22,254  in ANTA Sports Products on September 15, 2024 and sell it today you would earn a total of  3,913  from holding ANTA Sports Products or generate 17.58% return on investment over 90 days.

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

ANTA Sports Products  vs.  Sweetgreen

ANTA Sports Products

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, ANTA Sports showed solid returns over the last few months and may actually be approaching a breakup point.

Sweetgreen

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sweetgreen are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Sweetgreen reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANTA Sports and Sweetgreen

The main advantage of trading using opposite ANTA Sports and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANTA Sports 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 ANTA Sports Products 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.