Correlation Between Sleep Number and La Z
Can any of the company-specific risk be diversified away by investing in both Sleep Number and La Z 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 La Z 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 La Z Boy Incorporated, you can compare the effects of market volatilities on Sleep Number and La Z 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 La Z. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sleep Number and La Z.
Diversification Opportunities for Sleep Number and La Z
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sleep and LZB is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sleep Number Corp and La Z Boy Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Z Boy 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 La Z. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Z Boy has no effect on the direction of Sleep Number i.e., Sleep Number and La Z go up and down completely randomly.
Pair Corralation between Sleep Number and La Z
Given the investment horizon of 90 days Sleep Number Corp is expected to generate 3.73 times more return on investment than La Z. However, Sleep Number is 3.73 times more volatile than La Z Boy Incorporated. It trades about 0.13 of its potential returns per unit of risk. La Z Boy Incorporated is currently generating about 0.39 per unit of risk. If you would invest 1,323 in Sleep Number Corp on August 31, 2024 and sell it today you would earn a total of 193.00 from holding Sleep Number Corp or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sleep Number Corp vs. La Z Boy Incorporated
Performance |
| Timeline |
| Sleep Number Corp |
| La Z Boy |
Sleep Number and La Z Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sleep Number and La Z
The main advantage of trading using opposite Sleep Number and La Z positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sleep Number position performs unexpectedly, La Z 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 La Z will offset losses from the drop in La Z's long position.| Sleep Number vs. Viomi Technology ADR | Sleep Number vs. Energy Focu | Sleep Number vs. Flexsteel Industries | Sleep Number vs. Ethan Allen Interiors |
| La Z vs. Viomi Technology ADR | La Z vs. Energy Focu | La Z vs. Flexsteel Industries | La Z 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |