Correlation Between Casper Sleep and Applied UV

Can any of the company-specific risk be diversified away by investing in both Casper Sleep and Applied UV 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 Casper Sleep and Applied UV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Casper Sleep and Applied UV, you can compare the effects of market volatilities on Casper Sleep and Applied UV 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 Casper Sleep with a short position of Applied UV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casper Sleep and Applied UV.

Diversification Opportunities for Casper Sleep and Applied UV

0.0

Correlation Coefficient

Casper Sleep  Applied UV

Pay attention - limited upside

The 3 months correlation between Casper and Applied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Casper Sleep and Applied UV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied UV and Casper Sleep 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 Casper Sleep are associated (or correlated) with Applied UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied UV has no effect on the direction of Casper Sleep i.e., Casper Sleep and Applied UV go up and down completely randomly.

Pair Corralation between Casper Sleep and Applied UV

If you would invest (100.00) in Casper Sleep on January 25, 2024 and sell it today you would earn a total of  100.00  from holding Casper Sleep 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

Casper Sleep  vs.  Applied UV

Casper Sleep

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Casper Sleep has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Casper Sleep is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Applied UV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied UV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Casper Sleep and Applied UV

The main advantage of trading using opposite Casper Sleep and Applied UV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casper Sleep position performs unexpectedly, Applied UV 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 Applied UV will offset losses from the drop in Applied UV's long position.

The idea behind Casper Sleep and Applied UV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.