Correlation Between Sleep Cycle and Kjell Group
Can any of the company-specific risk be diversified away by investing in both Sleep Cycle and Kjell 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 Kjell 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 Kjell Group AB, you can compare the effects of market volatilities on Sleep Cycle and Kjell 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 Kjell Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sleep Cycle and Kjell Group.
Diversification Opportunities for Sleep Cycle and Kjell Group
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sleep and Kjell is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sleep Cycle AB and Kjell Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kjell 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 Kjell Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kjell Group AB has no effect on the direction of Sleep Cycle i.e., Sleep Cycle and Kjell Group go up and down completely randomly.
Pair Corralation between Sleep Cycle and Kjell Group
Assuming the 90 days trading horizon Sleep Cycle AB is expected to generate 0.8 times more return on investment than Kjell Group. However, Sleep Cycle AB is 1.25 times less risky than Kjell Group. It trades about 0.01 of its potential returns per unit of risk. Kjell Group AB is currently generating about -0.07 per unit of risk. If you would invest 4,042 in Sleep Cycle AB on September 24, 2024 and sell it today you would lose (302.00) from holding Sleep Cycle AB or give up 7.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sleep Cycle AB vs. Kjell Group AB
Performance |
| Timeline |
| Sleep Cycle AB |
| Kjell Group AB |
Sleep Cycle and Kjell Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sleep Cycle and Kjell Group
The main advantage of trading using opposite Sleep Cycle and Kjell Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sleep Cycle position performs unexpectedly, Kjell 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 Kjell Group will offset losses from the drop in Kjell 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 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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