Correlation Between Lifetime Brands and Tempur Sealy
Can any of the company-specific risk be diversified away by investing in both Lifetime Brands and Tempur Sealy 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 Lifetime Brands and Tempur Sealy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifetime Brands and Tempur Sealy International, you can compare the effects of market volatilities on Lifetime Brands and Tempur Sealy 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 Lifetime Brands with a short position of Tempur Sealy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifetime Brands and Tempur Sealy.
Diversification Opportunities for Lifetime Brands and Tempur Sealy
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lifetime and Tempur is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lifetime Brands and Tempur Sealy International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempur Sealy Interna and Lifetime Brands 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 Lifetime Brands are associated (or correlated) with Tempur Sealy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempur Sealy Interna has no effect on the direction of Lifetime Brands i.e., Lifetime Brands and Tempur Sealy go up and down completely randomly.
Pair Corralation between Lifetime Brands and Tempur Sealy
Given the investment horizon of 90 days Lifetime Brands is expected to generate 24.38 times less return on investment than Tempur Sealy. In addition to that, Lifetime Brands is 1.76 times more volatile than Tempur Sealy International. It trades about 0.0 of its total potential returns per unit of risk. Tempur Sealy International is currently generating about 0.07 per unit of volatility. If you would invest 3,163 in Tempur Sealy International on September 2, 2024 and sell it today you would earn a total of 2,435 from holding Tempur Sealy International or generate 76.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifetime Brands vs. Tempur Sealy International
Performance |
| Timeline |
| Lifetime Brands |
| Tempur Sealy Interna |
Lifetime Brands and Tempur Sealy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifetime Brands and Tempur Sealy
The main advantage of trading using opposite Lifetime Brands and Tempur Sealy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifetime Brands position performs unexpectedly, Tempur Sealy 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 Tempur Sealy will offset losses from the drop in Tempur Sealy's long position.| Lifetime Brands vs. Bassett Furniture Industries | Lifetime Brands vs. Flexsteel Industries | Lifetime Brands vs. Hamilton Beach Brands | Lifetime Brands vs. Natuzzi SpA |
| Tempur Sealy vs. La Z Boy Incorporated | Tempur Sealy vs. Purple Innovation | Tempur Sealy vs. MasterBrand | Tempur Sealy vs. Ethan Allen Interiors |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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