Correlation Between Lululemon Athletica and SIERRA METALS
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and SIERRA METALS 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 Lululemon Athletica and SIERRA METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and SIERRA METALS, you can compare the effects of market volatilities on Lululemon Athletica and SIERRA METALS 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 Lululemon Athletica with a short position of SIERRA METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and SIERRA METALS.
Diversification Opportunities for Lululemon Athletica and SIERRA METALS
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lululemon and SIERRA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and SIERRA METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIERRA METALS and Lululemon Athletica 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 Lululemon Athletica are associated (or correlated) with SIERRA METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIERRA METALS has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and SIERRA METALS go up and down completely randomly.
Pair Corralation between Lululemon Athletica and SIERRA METALS
Assuming the 90 days horizon Lululemon Athletica is expected to under-perform the SIERRA METALS. In addition to that, Lululemon Athletica is 1.15 times more volatile than SIERRA METALS. It trades about 0.0 of its total potential returns per unit of risk. SIERRA METALS is currently generating about 0.2 per unit of volatility. If you would invest 54.00 in SIERRA METALS on October 26, 2024 and sell it today you would earn a total of 4.00 from holding SIERRA METALS or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lululemon Athletica vs. SIERRA METALS
Performance |
| Timeline |
| Lululemon Athletica |
| SIERRA METALS |
Lululemon Athletica and SIERRA METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and SIERRA METALS
The main advantage of trading using opposite Lululemon Athletica and SIERRA METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, SIERRA METALS 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 SIERRA METALS will offset losses from the drop in SIERRA METALS's long position.| Lululemon Athletica vs. SIERRA METALS | Lululemon Athletica vs. Daito Trust Construction | Lululemon Athletica vs. Titan Machinery | Lululemon Athletica vs. Granite Construction |
| SIERRA METALS vs. Park Hotels Resorts | SIERRA METALS vs. MELIA HOTELS | SIERRA METALS vs. Hyatt Hotels | SIERRA METALS vs. Taiwan Semiconductor Manufacturing |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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