Correlation Between Sleep Number and Hope Education

Can any of the company-specific risk be diversified away by investing in both Sleep Number and Hope Education 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 Hope Education 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 Hope Education Group, you can compare the effects of market volatilities on Sleep Number and Hope Education 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 Hope Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sleep Number and Hope Education.

Diversification Opportunities for Sleep Number and Hope Education

0.0

Correlation Coefficient

Sleep Number  Hope Education

Pay attention - limited upside

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

Pair Corralation between Sleep Number and Hope Education

If you would invest  1.05  in Hope Education Group on April 22, 2025 and sell it today you would earn a total of  0.65  from holding Hope Education Group or generate 61.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Sleep Number Corp  vs.  Hope Education Group

Sleep Number Corp

Risk-Adjusted Performance

OK

Over the last 90 days Sleep Number Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sleep Number is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Hope Education Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hope Education Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hope Education reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sleep Number and Hope Education

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

The idea behind Sleep Number Corp and Hope Education Group 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.