Correlation Between Select Comfort and Libbey
Can any of the company-specific risk be diversified away by investing in both Select Comfort and Libbey 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 Select Comfort and Libbey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Comfort Corp and Libbey Inc, you can compare the effects of market volatilities on Select Comfort and Libbey 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 Select Comfort with a short position of Libbey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Comfort and Libbey.
Diversification Opportunities for Select Comfort and Libbey
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Select and Libbey is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Select Comfort Corp and Libbey Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libbey Inc and Select Comfort 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 Select Comfort Corp are associated (or correlated) with Libbey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libbey Inc has no effect on the direction of Select Comfort i.e., Select Comfort and Libbey go up and down completely randomly.
Pair Corralation between Select Comfort and Libbey
If you would invest (100.00) in Libbey Inc on December 29, 2023 and sell it today you would earn a total of 100.00 from holding Libbey Inc or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Select Comfort Corp vs. Libbey Inc
Performance |
Timeline |
Select Comfort Corp |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Libbey Inc |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Select Comfort and Libbey Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Select Comfort and Libbey
The main advantage of trading using opposite Select Comfort and Libbey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Comfort position performs unexpectedly, Libbey 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 Libbey will offset losses from the drop in Libbey's long position.Select Comfort vs. Western Digital | Select Comfort vs. National Beverage Corp | Select Comfort vs. Grupo Televisa SAB | Select Comfort vs. Diageo PLC ADR |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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