Correlation Between Sleep Number and Global E
Can any of the company-specific risk be diversified away by investing in both Sleep Number and Global E 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 Number and Global E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sleep Number Corp and Global E Online, you can compare the effects of market volatilities on Sleep Number and Global E 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 Number with a short position of Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sleep Number and Global E.
Diversification Opportunities for Sleep Number and Global E
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sleep and Global is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sleep Number Corp and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online and Sleep Number 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 Number Corp are associated (or correlated) with Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Sleep Number i.e., Sleep Number and Global E go up and down completely randomly.
Pair Corralation between Sleep Number and Global E
Given the investment horizon of 90 days Sleep Number is expected to generate 1.16 times less return on investment than Global E. In addition to that, Sleep Number is 2.01 times more volatile than Global E Online. It trades about 0.14 of its total potential returns per unit of risk. Global E Online is currently generating about 0.34 per unit of volatility. If you would invest 3,833 in Global E Online on November 1, 2024 and sell it today you would earn a total of 2,231 from holding Global E Online or generate 58.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sleep Number Corp vs. Global E Online
Performance |
| Timeline |
| Sleep Number Corp |
| Global E Online |
Sleep Number and Global E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sleep Number and Global E
The main advantage of trading using opposite Sleep Number and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sleep Number position performs unexpectedly, Global E 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 Global E will offset losses from the drop in Global E's long position.| Sleep Number vs. Purple Innovation | Sleep Number vs. Mohawk Industries | Sleep Number vs. La Z Boy Incorporated | Sleep Number vs. Leggett Platt Incorporated |
| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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