Food for Thought
Digesting the volatility, correlation and capitalization of food-related stocks
A comparison of food-related stocks reveals some interesting insights. For one, these stocks have a distinctly low correlation to the S&P 500, which suggests their value as portfolio diversification vehicles. The inverse relationship between market capitalization and volatility is also interesting. The higher the volatility, the higher the risk of significant fluctuation. This implies both opportunity and risk.
Notable in the table on the right is Sweetgreen (SG), a fast-food chain selling expensive salads. Right now, Sweetgreen is bleeding money (negative net income), but if it can control expenses it can find room for growth. Revenues have been increasing over the quarter, and while its stock price has climbed 65% there’s still...
