Correlation Between MillerKnoll and Sleep Number
Can any of the company-specific risk be diversified away by investing in both MillerKnoll 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 MillerKnoll and Sleep Number into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MillerKnoll and Sleep Number Corp, you can compare the effects of market volatilities on MillerKnoll 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 MillerKnoll with a short position of Sleep Number. Check out your portfolio center. Please also check ongoing floating volatility patterns of MillerKnoll and Sleep Number.
Diversification Opportunities for MillerKnoll and Sleep Number
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MillerKnoll and Sleep is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding MillerKnoll 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 MillerKnoll 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 MillerKnoll 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 MillerKnoll i.e., MillerKnoll and Sleep Number go up and down completely randomly.
Pair Corralation between MillerKnoll and Sleep Number
Given the investment horizon of 90 days MillerKnoll is expected to generate 0.53 times more return on investment than Sleep Number. However, MillerKnoll is 1.88 times less risky than Sleep Number. It trades about 0.03 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 1,831 in MillerKnoll on August 27, 2024 and sell it today you would earn a total of 622.00 from holding MillerKnoll or generate 33.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MillerKnoll vs. Sleep Number Corp
Performance |
| Timeline |
| MillerKnoll |
| Sleep Number Corp |
MillerKnoll and Sleep Number Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MillerKnoll and Sleep Number
The main advantage of trading using opposite MillerKnoll and Sleep Number positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MillerKnoll 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.| MillerKnoll vs. Bassett Furniture Industries | MillerKnoll vs. Ethan Allen Interiors | MillerKnoll vs. Natuzzi SpA | MillerKnoll vs. Flexsteel Industries |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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