Correlation Between Sleep Cycle and CAG Group
Can any of the company-specific risk be diversified away by investing in both Sleep Cycle and CAG Group 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 Sleep Cycle and CAG Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sleep Cycle AB and CAG Group AB, you can compare the effects of market volatilities on Sleep Cycle and CAG Group 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 Sleep Cycle with a short position of CAG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sleep Cycle and CAG Group.
Diversification Opportunities for Sleep Cycle and CAG Group
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sleep and CAG is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sleep Cycle AB and CAG Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAG Group AB and Sleep Cycle 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 Sleep Cycle AB are associated (or correlated) with CAG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAG Group AB has no effect on the direction of Sleep Cycle i.e., Sleep Cycle and CAG Group go up and down completely randomly.
Pair Corralation between Sleep Cycle and CAG Group
Assuming the 90 days trading horizon Sleep Cycle is expected to generate 3.07 times less return on investment than CAG Group. In addition to that, Sleep Cycle is 1.93 times more volatile than CAG Group AB. It trades about 0.01 of its total potential returns per unit of risk. CAG Group AB is currently generating about 0.05 per unit of volatility. If you would invest 8,185 in CAG Group AB on September 24, 2024 and sell it today you would earn a total of 2,915 from holding CAG Group AB or generate 35.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sleep Cycle AB vs. CAG Group AB
Performance |
| Timeline |
| Sleep Cycle AB |
| CAG Group AB |
Sleep Cycle and CAG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sleep Cycle and CAG Group
The main advantage of trading using opposite Sleep Cycle and CAG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sleep Cycle position performs unexpectedly, CAG Group 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 CAG Group will offset losses from the drop in CAG Group's long position.| Sleep Cycle vs. Humble Group AB | Sleep Cycle vs. Enad Global 7 | Sleep Cycle vs. Goodbye Kansas Group | Sleep Cycle vs. Mekonomen AB |
| CAG Group vs. FormPipe Software AB | CAG Group vs. Micro Systemation AB | CAG Group vs. CTT Systems AB | CAG Group vs. G5 Entertainment publ |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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