Correlation Between Keurig Dr and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Keurig Dr 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 Keurig Dr and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keurig Dr Pepper and Lululemon Athletica, you can compare the effects of market volatilities on Keurig Dr 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 Keurig Dr with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keurig Dr and Lululemon Athletica.
Diversification Opportunities for Keurig Dr and Lululemon Athletica
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Keurig and Lululemon is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Keurig Dr Pepper and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Keurig Dr 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 Keurig Dr Pepper 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 Keurig Dr i.e., Keurig Dr and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Keurig Dr and Lululemon Athletica
Considering the 90-day investment horizon Keurig Dr Pepper is expected to under-perform the Lululemon Athletica. But the stock apears to be less risky and, when comparing its historical volatility, Keurig Dr Pepper is 1.57 times less risky than Lululemon Athletica. The stock trades about -0.01 of its potential returns per unit of risk. The Lululemon Athletica is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 31,813 in Lululemon Athletica on September 4, 2024 and sell it today you would earn a total of 1,627 from holding Lululemon Athletica or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keurig Dr Pepper vs. Lululemon Athletica
Performance |
| Timeline |
| Keurig Dr Pepper |
| Lululemon Athletica |
Keurig Dr and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keurig Dr and Lululemon Athletica
The main advantage of trading using opposite Keurig Dr and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keurig Dr 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.| Keurig Dr vs. Celsius Holdings | Keurig Dr vs. Vita Coco | Keurig Dr vs. PepsiCo | Keurig Dr vs. Coca Cola Femsa SAB |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |