Correlation Between CDL INVESTMENT and Sleep Number
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT and Sleep Number 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 CDL INVESTMENT and Sleep Number into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and Sleep Number Corp, you can compare the effects of market volatilities on CDL INVESTMENT and Sleep Number 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 CDL INVESTMENT with a short position of Sleep Number. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and Sleep Number.
Diversification Opportunities for CDL INVESTMENT and Sleep Number
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CDL and Sleep is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT and Sleep Number Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sleep Number Corp and CDL INVESTMENT 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 CDL INVESTMENT are associated (or correlated) with Sleep Number. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sleep Number Corp has no effect on the direction of CDL INVESTMENT i.e., CDL INVESTMENT and Sleep Number go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and Sleep Number
Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 16.14 times less return on investment than Sleep Number. But when comparing it to its historical volatility, CDL INVESTMENT is 3.81 times less risky than Sleep Number. It trades about 0.08 of its potential returns per unit of risk. Sleep Number Corp is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,310 in Sleep Number Corp on September 14, 2024 and sell it today you would earn a total of 610.00 from holding Sleep Number Corp or generate 46.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDL INVESTMENT vs. Sleep Number Corp
Performance |
| Timeline |
| CDL INVESTMENT |
| Sleep Number Corp |
CDL INVESTMENT and Sleep Number Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and Sleep Number
The main advantage of trading using opposite CDL INVESTMENT and Sleep Number positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT position performs unexpectedly, Sleep Number 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 Sleep Number will offset losses from the drop in Sleep Number's long position.| CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc | CDL INVESTMENT vs. Apple Inc |
| Sleep Number vs. AGNC INVESTMENT | Sleep Number vs. CVR Medical Corp | Sleep Number vs. HK Electric Investments | Sleep Number vs. CDL 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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