Correlation Between Flexsteel Industries and Sleep Number
Can any of the company-specific risk be diversified away by investing in both Flexsteel Industries 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 Flexsteel Industries and Sleep Number into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexsteel Industries and Sleep Number Corp, you can compare the effects of market volatilities on Flexsteel Industries 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 Flexsteel Industries with a short position of Sleep Number. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexsteel Industries and Sleep Number.
Diversification Opportunities for Flexsteel Industries and Sleep Number
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flexsteel and Sleep is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Flexsteel Industries 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 Flexsteel Industries 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 Flexsteel Industries 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 Flexsteel Industries i.e., Flexsteel Industries and Sleep Number go up and down completely randomly.
Pair Corralation between Flexsteel Industries and Sleep Number
Given the investment horizon of 90 days Flexsteel Industries is expected to generate 0.65 times more return on investment than Sleep Number. However, Flexsteel Industries is 1.54 times less risky than Sleep Number. It trades about 0.1 of its potential returns per unit of risk. Sleep Number Corp is currently generating about 0.01 per unit of risk. If you would invest 1,767 in Flexsteel Industries on August 27, 2024 and sell it today you would earn a total of 4,204 from holding Flexsteel Industries or generate 237.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexsteel Industries vs. Sleep Number Corp
Performance |
| Timeline |
| Flexsteel Industries |
| Sleep Number Corp |
Flexsteel Industries and Sleep Number Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexsteel Industries and Sleep Number
The main advantage of trading using opposite Flexsteel Industries and Sleep Number positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexsteel Industries 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.| Flexsteel Industries vs. Willis Lease Finance | Flexsteel Industries vs. Rocky Brands | Flexsteel Industries vs. First Business Financial |
| Sleep Number vs. Purple Innovation | Sleep Number vs. Mohawk Industries | Sleep Number vs. La Z Boy Incorporated | Sleep Number vs. Leggett Platt Incorporated |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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