Correlation Between GoHealth and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both GoHealth 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 GoHealth and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoHealth and Lululemon Athletica, you can compare the effects of market volatilities on GoHealth 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 GoHealth with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoHealth and Lululemon Athletica.
Diversification Opportunities for GoHealth and Lululemon Athletica
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GoHealth and Lululemon is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding GoHealth and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and GoHealth 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 GoHealth 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 GoHealth i.e., GoHealth and Lululemon Athletica go up and down completely randomly.
Pair Corralation between GoHealth and Lululemon Athletica
Given the investment horizon of 90 days GoHealth is expected to generate 2.26 times more return on investment than Lululemon Athletica. However, GoHealth is 2.26 times more volatile than Lululemon Athletica. It trades about 0.03 of its potential returns per unit of risk. Lululemon Athletica is currently generating about 0.03 per unit of risk. If you would invest 1,621 in GoHealth on November 19, 2024 and sell it today you would earn a total of 294.00 from holding GoHealth or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoHealth vs. Lululemon Athletica
Performance |
| Timeline |
| GoHealth |
| Lululemon Athletica |
GoHealth and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoHealth and Lululemon Athletica
The main advantage of trading using opposite GoHealth and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoHealth 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.| GoHealth vs. eHealth | GoHealth vs. Tian Ruixiang Holdings | GoHealth vs. Huize Holding | GoHealth vs. Selectquote |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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