Correlation Between Ispire Technology and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Ispire Technology 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 Ispire Technology and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ispire Technology Common and Lululemon Athletica, you can compare the effects of market volatilities on Ispire Technology 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 Ispire Technology with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ispire Technology and Lululemon Athletica.
Diversification Opportunities for Ispire Technology and Lululemon Athletica
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ispire and Lululemon is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ispire Technology Common and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Ispire Technology 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 Ispire Technology Common 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 Ispire Technology i.e., Ispire Technology and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Ispire Technology and Lululemon Athletica
Given the investment horizon of 90 days Ispire Technology Common is expected to generate 2.54 times more return on investment than Lululemon Athletica. However, Ispire Technology is 2.54 times more volatile than Lululemon Athletica. It trades about 0.01 of its potential returns per unit of risk. Lululemon Athletica is currently generating about 0.02 per unit of risk. If you would invest 779.00 in Ispire Technology Common on September 12, 2024 and sell it today you would lose (185.00) from holding Ispire Technology Common or give up 23.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ispire Technology Common vs. Lululemon Athletica
Performance |
| Timeline |
| Ispire Technology Common |
| Lululemon Athletica |
Ispire Technology and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ispire Technology and Lululemon Athletica
The main advantage of trading using opposite Ispire Technology and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ispire Technology 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.| Ispire Technology vs. Chewy Inc | Ispire Technology vs. Simon Property Group | Ispire Technology vs. Radcom | Ispire Technology vs. Revolve Group LLC |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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