Correlation Between FirsTime Design and Sleep Number
Can any of the company-specific risk be diversified away by investing in both FirsTime Design 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 FirsTime Design and Sleep Number into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirsTime Design and Sleep Number Corp, you can compare the effects of market volatilities on FirsTime Design 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 FirsTime Design with a short position of Sleep Number. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirsTime Design and Sleep Number.
Diversification Opportunities for FirsTime Design and Sleep Number
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FirsTime and Sleep is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding FirsTime Design 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 FirsTime Design 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 FirsTime Design 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 FirsTime Design i.e., FirsTime Design and Sleep Number go up and down completely randomly.
Pair Corralation between FirsTime Design and Sleep Number
If you would invest 1,495 in Sleep Number Corp on November 2, 2024 and sell it today you would earn a total of 304.00 from holding Sleep Number Corp or generate 20.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
FirsTime Design vs. Sleep Number Corp
Performance |
| Timeline |
| FirsTime Design |
| Sleep Number Corp |
FirsTime Design and Sleep Number Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirsTime Design and Sleep Number
The main advantage of trading using opposite FirsTime Design and Sleep Number positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirsTime Design 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.| FirsTime Design vs. Sleep Number Corp | FirsTime Design vs. The Lovesac | FirsTime Design vs. Tempur Sealy International | FirsTime Design vs. MillerKnoll |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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