Correlation Between Kite Realty and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Kite Realty 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 Kite Realty and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kite Realty Group and Lululemon Athletica, you can compare the effects of market volatilities on Kite Realty 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 Kite Realty with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kite Realty and Lululemon Athletica.
Diversification Opportunities for Kite Realty and Lululemon Athletica
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kite and Lululemon is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kite Realty Group and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Kite Realty 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 Kite Realty Group 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 Kite Realty i.e., Kite Realty and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Kite Realty and Lululemon Athletica
Considering the 90-day investment horizon Kite Realty Group is expected to under-perform the Lululemon Athletica. But the stock apears to be less risky and, when comparing its historical volatility, Kite Realty Group is 1.14 times less risky than Lululemon Athletica. The stock trades about -0.1 of its potential returns per unit of risk. The Lululemon Athletica is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 37,370 in Lululemon Athletica on November 18, 2024 and sell it today you would lose (702.00) from holding Lululemon Athletica or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kite Realty Group vs. Lululemon Athletica
Performance |
| Timeline |
| Kite Realty Group |
| Lululemon Athletica |
Kite Realty and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kite Realty and Lululemon Athletica
The main advantage of trading using opposite Kite Realty and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kite Realty 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.| Kite Realty vs. Site Centers Corp | Kite Realty vs. CBL Associates Properties | Kite Realty vs. Urban Edge Properties | Kite Realty vs. Acadia Realty Trust |
| Lululemon Athletica vs. American Eagle Outfitters | Lululemon Athletica vs. Abercrombie Fitch | Lululemon Athletica vs. Urban Outfitters | Lululemon Athletica vs. Foot Locker |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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