Correlation Between Bluerock Homes and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Bluerock Homes and Lululemon Athletica 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 Bluerock Homes and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluerock Homes Trust and Lululemon Athletica, you can compare the effects of market volatilities on Bluerock Homes and Lululemon Athletica 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 Bluerock Homes with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluerock Homes and Lululemon Athletica.
Diversification Opportunities for Bluerock Homes and Lululemon Athletica
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bluerock and Lululemon is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Bluerock Homes 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 Bluerock Homes Trust are associated (or correlated) with Lululemon Athletica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lululemon Athletica has no effect on the direction of Bluerock Homes i.e., Bluerock Homes and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Bluerock Homes and Lululemon Athletica
Considering the 90-day investment horizon Bluerock Homes Trust is expected to under-perform the Lululemon Athletica. But the stock apears to be less risky and, when comparing its historical volatility, Bluerock Homes Trust is 1.05 times less risky than Lululemon Athletica. The stock trades about -0.06 of its potential returns per unit of risk. The Lululemon Athletica is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 31,786 in Lululemon Athletica on September 5, 2024 and sell it today you would earn a total of 2,280 from holding Lululemon Athletica or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluerock Homes Trust vs. Lululemon Athletica
Performance |
| Timeline |
| Bluerock Homes Trust |
| Lululemon Athletica |
Bluerock Homes and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluerock Homes and Lululemon Athletica
The main advantage of trading using opposite Bluerock Homes and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluerock Homes position performs unexpectedly, Lululemon Athletica 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 Lululemon Athletica will offset losses from the drop in Lululemon Athletica's long position.| Bluerock Homes vs. Nexpoint Residential Trust | Bluerock Homes vs. Clipper Realty | Bluerock Homes vs. Centerspace | Bluerock Homes vs. Equity Lifestyle Properties |
| Lululemon Athletica vs. VF Corporation | Lululemon Athletica vs. Levi Strauss Co | Lululemon Athletica vs. Under Armour A | Lululemon Athletica vs. Columbia Sportswear |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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