Correlation Between IMPERIAL TOBACCO and Sleep Number
Can any of the company-specific risk be diversified away by investing in both IMPERIAL TOBACCO 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 IMPERIAL TOBACCO and Sleep Number into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMPERIAL TOBACCO and Sleep Number Corp, you can compare the effects of market volatilities on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO with a short position of Sleep Number. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMPERIAL TOBACCO and Sleep Number.
Diversification Opportunities for IMPERIAL TOBACCO and Sleep Number
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IMPERIAL and Sleep is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO i.e., IMPERIAL TOBACCO and Sleep Number go up and down completely randomly.
Pair Corralation between IMPERIAL TOBACCO and Sleep Number
Assuming the 90 days trading horizon IMPERIAL TOBACCO is expected to generate 0.21 times more return on investment than Sleep Number. However, IMPERIAL TOBACCO is 4.74 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 0.0 per unit of risk. If you would invest 2,040 in IMPERIAL TOBACCO on September 5, 2024 and sell it today you would earn a total of 1,015 from holding IMPERIAL TOBACCO or generate 49.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IMPERIAL TOBACCO vs. Sleep Number Corp
Performance |
| Timeline |
| IMPERIAL TOBACCO |
| Sleep Number Corp |
IMPERIAL TOBACCO and Sleep Number Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMPERIAL TOBACCO and Sleep Number
The main advantage of trading using opposite IMPERIAL TOBACCO and Sleep Number positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMPERIAL TOBACCO 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.| IMPERIAL TOBACCO vs. GOODYEAR T RUBBER | IMPERIAL TOBACCO vs. Materialise NV | IMPERIAL TOBACCO vs. APPLIED MATERIALS | IMPERIAL TOBACCO vs. China Resources Beer |
| Sleep Number vs. Scandinavian Tobacco Group | Sleep Number vs. Liberty Broadband | Sleep Number vs. G III Apparel Group | Sleep Number vs. IMPERIAL TOBACCO |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |