Correlation Between Lululemon Athletica and Banzai International
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and Banzai International 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 Lululemon Athletica and Banzai International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and Banzai International, you can compare the effects of market volatilities on Lululemon Athletica and Banzai International 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 Lululemon Athletica with a short position of Banzai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and Banzai International.
Diversification Opportunities for Lululemon Athletica and Banzai International
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lululemon and Banzai is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and Banzai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banzai International and Lululemon Athletica 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 Lululemon Athletica are associated (or correlated) with Banzai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banzai International has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and Banzai International go up and down completely randomly.
Pair Corralation between Lululemon Athletica and Banzai International
Given the investment horizon of 90 days Lululemon Athletica is expected to generate 0.3 times more return on investment than Banzai International. However, Lululemon Athletica is 3.31 times less risky than Banzai International. It trades about 0.28 of its potential returns per unit of risk. Banzai International is currently generating about 0.03 per unit of risk. If you would invest 32,090 in Lululemon Athletica on September 13, 2024 and sell it today you would earn a total of 7,885 from holding Lululemon Athletica or generate 24.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lululemon Athletica vs. Banzai International
Performance |
| Timeline |
| Lululemon Athletica |
| Banzai International |
Lululemon Athletica and Banzai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and Banzai International
The main advantage of trading using opposite Lululemon Athletica and Banzai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, Banzai International 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 Banzai International will offset losses from the drop in Banzai International's long position.| Lululemon Athletica vs. Digital Brands Group | Lululemon Athletica vs. Data Storage | Lululemon Athletica vs. Auddia Inc | Lululemon Athletica vs. DatChat Series A |
| Banzai International vs. Vera Bradley | Banzai International vs. Eastern Co | Banzai International vs. Lululemon Athletica | Banzai International vs. Zumiez Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |