Correlation Between Eshallgo and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Eshallgo 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 Eshallgo and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eshallgo Class A and Lululemon Athletica, you can compare the effects of market volatilities on Eshallgo 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 Eshallgo with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eshallgo and Lululemon Athletica.
Diversification Opportunities for Eshallgo and Lululemon Athletica
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eshallgo and Lululemon is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eshallgo Class A and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Eshallgo 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 Eshallgo Class A 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 Eshallgo i.e., Eshallgo and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Eshallgo and Lululemon Athletica
Given the investment horizon of 90 days Eshallgo Class A is expected to generate 44.13 times more return on investment than Lululemon Athletica. However, Eshallgo is 44.13 times more volatile than Lululemon Athletica. It trades about 0.1 of its potential returns per unit of risk. Lululemon Athletica is currently generating about 0.0 per unit of risk. If you would invest 0.00 in Eshallgo Class A on August 27, 2024 and sell it today you would earn a total of 375.00 from holding Eshallgo Class A or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 20.97% |
| Values | Daily Returns |
Eshallgo Class A vs. Lululemon Athletica
Performance |
| Timeline |
| Eshallgo Class A |
| Lululemon Athletica |
Eshallgo and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eshallgo and Lululemon Athletica
The main advantage of trading using opposite Eshallgo and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eshallgo 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.| Eshallgo vs. Lululemon Athletica | Eshallgo vs. Asbury Automotive Group | Eshallgo vs. SunLink Health Systems | Eshallgo vs. Simon Property Group |
| Lululemon Athletica vs. VF Corporation | Lululemon Athletica vs. Levi Strauss Co | Lululemon Athletica vs. Under Armour A | Lululemon Athletica vs. Oxford Industries |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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