Correlation Between Sweetgreen and Acadia Healthcare
Can any of the company-specific risk be diversified away by investing in both Sweetgreen and Acadia Healthcare 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 Acadia Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweetgreen and Acadia Healthcare, you can compare the effects of market volatilities on Sweetgreen and Acadia Healthcare 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 Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweetgreen and Acadia Healthcare.
Diversification Opportunities for Sweetgreen and Acadia Healthcare
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sweetgreen and Acadia is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare 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 Acadia Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Healthcare has no effect on the direction of Sweetgreen i.e., Sweetgreen and Acadia Healthcare go up and down completely randomly.
Pair Corralation between Sweetgreen and Acadia Healthcare
Allowing for the 90-day total investment horizon Sweetgreen is expected to generate 4.16 times more return on investment than Acadia Healthcare. However, Sweetgreen is 4.16 times more volatile than Acadia Healthcare. It trades about 0.56 of its potential returns per unit of risk. Acadia Healthcare is currently generating about -0.27 per unit of risk. If you would invest 1,203 in Sweetgreen on December 29, 2023 and sell it today you would earn a total of 1,345 from holding Sweetgreen or generate 111.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.65% |
Values | Daily Returns |
Sweetgreen vs. Acadia Healthcare
Performance |
Timeline |
Sweetgreen |
Acadia Healthcare |
Sweetgreen and Acadia Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sweetgreen and Acadia Healthcare
The main advantage of trading using opposite Sweetgreen and Acadia Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweetgreen position performs unexpectedly, Acadia Healthcare 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 Acadia Healthcare will offset losses from the drop in Acadia Healthcare's long position.Sweetgreen vs. Hyatt Hotels | Sweetgreen vs. Smart Share Global | Sweetgreen vs. Wyndham Hotels Resorts | Sweetgreen vs. WW International |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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