Correlation Between Sweetgreen and Polaris Industries

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

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

Diversification Opportunities for Sweetgreen and Polaris Industries

-0.16

Correlation Coefficient

Sweetgreen  Polaris Industries

Good diversification

The 3 months correlation between Sweetgreen and Polaris is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sweetgreen and Polaris Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Industries 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 Polaris Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Industries has no effect on the direction of Sweetgreen i.e., Sweetgreen and Polaris Industries go up and down completely randomly.

Pair Corralation between Sweetgreen and Polaris Industries

Allowing for the 90-day total investment horizon Sweetgreen is expected to under-perform the Polaris Industries. In addition to that, Sweetgreen is 1.26 times more volatile than Polaris Industries. It trades about -0.13 of its total potential returns per unit of risk. Polaris Industries is currently generating about 0.18 per unit of volatility. If you would invest  3,334  in Polaris Industries on May 4, 2025 and sell it today you would earn a total of  1,628  from holding Polaris Industries or generate 48.83% return on investment over 90 days.

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

Sweetgreen  vs.  Polaris Industries

Sweetgreen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sweetgreen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Polaris Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Polaris Industries are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, Polaris Industries demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sweetgreen and Polaris Industries

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

The idea behind Sweetgreen and Polaris Industries 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.