Correlation Between Chanson International and Sleep Number

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Can any of the company-specific risk be diversified away by investing in both Chanson International 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 Chanson International and Sleep Number into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chanson International Holding and Sleep Number Corp, you can compare the effects of market volatilities on Chanson International 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 Chanson International with a short position of Sleep Number. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chanson International and Sleep Number.

Diversification Opportunities for Chanson International and Sleep Number

ChansonSleepDiversified AwayChansonSleepDiversified Away100%
-0.17
  Correlation Coefficient

Good diversification

The 3 months correlation between Chanson and Sleep is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Chanson International Holding 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 Chanson International 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 Chanson International Holding 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 Chanson International i.e., Chanson International and Sleep Number go up and down completely randomly.

Pair Corralation between Chanson International and Sleep Number

Given the investment horizon of 90 days Chanson International Holding is expected to under-perform the Sleep Number. In addition to that, Chanson International is 1.21 times more volatile than Sleep Number Corp. It trades about -0.44 of its total potential returns per unit of risk. Sleep Number Corp is currently generating about -0.24 per unit of volatility. If you would invest  1,882  in Sleep Number Corp on November 25, 2024 and sell it today you would lose (433.00) from holding Sleep Number Corp or give up 23.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Chanson International Holding  vs.  Sleep Number Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100-50050
JavaScript chart by amCharts 3.21.15CHSN SNBR
       Timeline  
Chanson International 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Chanson International Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb124681012
Sleep Number Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Sleep Number Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Sleep Number is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1314151617181920

Chanson International and Sleep Number Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-22.71-17.01-11.31-5.61-0.08064.599.4314.2719.1123.94 0.0050.0100.015
JavaScript chart by amCharts 3.21.15CHSN SNBR
       Returns  

Pair Trading with Chanson International and Sleep Number

The main advantage of trading using opposite Chanson International and Sleep Number positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chanson International 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.
The idea behind Chanson International Holding and Sleep Number Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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