Correlation Between Sweetgreen and ANTA Sports

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

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

Diversification Opportunities for Sweetgreen and ANTA Sports

-0.09

Correlation Coefficient

Sweetgreen  ANTA Sports

Good diversification

The 3 months correlation between Sweetgreen and ANTA is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products 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 ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of Sweetgreen i.e., Sweetgreen and ANTA Sports go up and down completely randomly.

Pair Corralation between Sweetgreen and ANTA Sports

Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 3.42 times less return on investment than ANTA Sports. But when comparing it to its historical volatility, Sweetgreen is 1.04 times less risky than ANTA Sports. It trades about 0.02 of its potential returns per unit of risk. ANTA Sports Products is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  22,254  in ANTA Sports Products on September 15, 2024 and sell it today you would earn a total of  3,889  from holding ANTA Sports Products or generate 17.48% return on investment over 90 days.

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

Sweetgreen  vs.  ANTA Sports Products

Sweetgreen

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sweetgreen are ranked lower than 1 (%) 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.

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.

Pair Trading with Sweetgreen and ANTA Sports

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

The idea behind Sweetgreen and ANTA Sports Products 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.