Correlation Between CAG Group and Sleep Cycle
Can any of the company-specific risk be diversified away by investing in both CAG Group and Sleep Cycle 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 CAG Group and Sleep Cycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAG Group AB and Sleep Cycle AB, you can compare the effects of market volatilities on CAG Group and Sleep Cycle 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 CAG Group with a short position of Sleep Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAG Group and Sleep Cycle.
Diversification Opportunities for CAG Group and Sleep Cycle
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAG and Sleep is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CAG Group AB and Sleep Cycle AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sleep Cycle AB and CAG Group 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 CAG Group AB are associated (or correlated) with Sleep Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sleep Cycle AB has no effect on the direction of CAG Group i.e., CAG Group and Sleep Cycle go up and down completely randomly.
Pair Corralation between CAG Group and Sleep Cycle
Assuming the 90 days trading horizon CAG Group AB is expected to generate 0.52 times more return on investment than Sleep Cycle. However, CAG Group AB is 1.93 times less risky than Sleep Cycle. It trades about 0.05 of its potential returns per unit of risk. Sleep Cycle AB is currently generating about 0.01 per unit of risk. If you would invest 8,185 in CAG Group AB on September 24, 2024 and sell it today you would earn a total of 2,915 from holding CAG Group AB or generate 35.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAG Group AB vs. Sleep Cycle AB
Performance |
| Timeline |
| CAG Group AB |
| Sleep Cycle AB |
CAG Group and Sleep Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAG Group and Sleep Cycle
The main advantage of trading using opposite CAG Group and Sleep Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAG Group position performs unexpectedly, Sleep Cycle 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 Cycle will offset losses from the drop in Sleep Cycle's long position.| CAG Group vs. FormPipe Software AB | CAG Group vs. Micro Systemation AB | CAG Group vs. CTT Systems AB | CAG Group vs. G5 Entertainment publ |
| Sleep Cycle vs. Humble Group AB | Sleep Cycle vs. Enad Global 7 | Sleep Cycle vs. Goodbye Kansas Group | Sleep Cycle vs. Mekonomen AB |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |