Correlation Between Xtrackers ShortDAX and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX 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 Xtrackers ShortDAX and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Lululemon Athletica, you can compare the effects of market volatilities on Xtrackers ShortDAX 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 Xtrackers ShortDAX with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Lululemon Athletica.
Diversification Opportunities for Xtrackers ShortDAX and Lululemon Athletica
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and Lululemon is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Xtrackers ShortDAX 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 Xtrackers ShortDAX 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 Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Lululemon Athletica
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to under-perform the Lululemon Athletica. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX is 1.86 times less risky than Lululemon Athletica. The etf trades about -0.42 of its potential returns per unit of risk. The Lululemon Athletica is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 36,530 in Lululemon Athletica on October 23, 2024 and sell it today you would lose (520.00) from holding Lululemon Athletica or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Lululemon Athletica
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Lululemon Athletica |
Xtrackers ShortDAX and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Lululemon Athletica
The main advantage of trading using opposite Xtrackers ShortDAX and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX 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.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Lululemon Athletica vs. DETALION GAMES SA | Lululemon Athletica vs. Penn National Gaming | Lululemon Athletica vs. Boyd Gaming | Lululemon Athletica vs. PENN NATL GAMING |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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