Correlation Between Integral and Sweetgreen

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

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

Diversification Opportunities for Integral and Sweetgreen

0.42

Correlation Coefficient

Integral  Sweetgreen

Very weak diversification

The 3 months correlation between Integral and Sweetgreen is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Sweetgreen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sweetgreen and Integral 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 Integral Ad Science 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 Integral i.e., Integral and Sweetgreen go up and down completely randomly.

Pair Corralation between Integral and Sweetgreen

Considering the 90-day investment horizon Integral is expected to generate 4.23 times less return on investment than Sweetgreen. But when comparing it to its historical volatility, Integral Ad Science is 1.44 times less risky than Sweetgreen. It trades about 0.02 of its potential returns per unit of risk. Sweetgreen is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,395  in Sweetgreen on September 12, 2024 and sell it today you would earn a total of  265.00  from holding Sweetgreen or generate 7.81% return on investment over 90 days.

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

Integral Ad Science  vs.  Sweetgreen

Integral Ad Science

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sweetgreen

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sweetgreen are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Sweetgreen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Integral and Sweetgreen

The main advantage of trading using opposite Integral and Sweetgreen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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.

Check out your portfolio center.

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.