Correlation Between Kura Sushi and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Kura Sushi 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 Kura Sushi and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kura Sushi USA and Lululemon Athletica, you can compare the effects of market volatilities on Kura Sushi 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 Kura Sushi with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kura Sushi and Lululemon Athletica.
Diversification Opportunities for Kura Sushi and Lululemon Athletica
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kura and Lululemon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kura Sushi USA and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Kura Sushi 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 Kura Sushi USA 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 Kura Sushi i.e., Kura Sushi and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Kura Sushi and Lululemon Athletica
Given the investment horizon of 90 days Kura Sushi is expected to generate 1.94 times less return on investment than Lululemon Athletica. But when comparing it to its historical volatility, Kura Sushi USA is 1.17 times less risky than Lululemon Athletica. It trades about 0.15 of its potential returns per unit of risk. Lululemon Athletica is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 32,090 in Lululemon Athletica on September 13, 2024 and sell it today you would earn a total of 6,843 from holding Lululemon Athletica or generate 21.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kura Sushi USA vs. Lululemon Athletica
Performance |
| Timeline |
| Kura Sushi USA |
| Lululemon Athletica |
Kura Sushi and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kura Sushi and Lululemon Athletica
The main advantage of trading using opposite Kura Sushi and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kura Sushi 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.| Kura Sushi vs. Brinker International | Kura Sushi vs. Dennys Corp | Kura Sushi vs. Bloomin Brands | Kura Sushi vs. Jack In The |
| Lululemon Athletica vs. Digital Brands Group | Lululemon Athletica vs. Data Storage | Lululemon Athletica vs. Auddia Inc | Lululemon Athletica vs. DatChat Series A |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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