Correlation Between Lululemon Athletica and California-Engels
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and California-Engels 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 California-Engels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and California Engels Mining, you can compare the effects of market volatilities on Lululemon Athletica and California-Engels 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 California-Engels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and California-Engels.
Diversification Opportunities for Lululemon Athletica and California-Engels
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lululemon and California-Engels is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and California Engels Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Engels Mining 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 California-Engels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Engels Mining has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and California-Engels go up and down completely randomly.
Pair Corralation between Lululemon Athletica and California-Engels
If you would invest 25,808 in Lululemon Athletica on November 2, 2024 and sell it today you would earn a total of 16,308 from holding Lululemon Athletica or generate 63.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.26% |
| Values | Daily Returns |
Lululemon Athletica vs. California Engels Mining
Performance |
| Timeline |
| Lululemon Athletica |
| California Engels Mining |
Lululemon Athletica and California-Engels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and California-Engels
The main advantage of trading using opposite Lululemon Athletica and California-Engels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, California-Engels 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 California-Engels will offset losses from the drop in California-Engels' long position.| Lululemon Athletica vs. American Eagle Outfitters | Lululemon Athletica vs. Abercrombie Fitch | Lululemon Athletica vs. Urban Outfitters | Lululemon Athletica vs. Foot Locker |
| California-Engels vs. Nippon Steel Corp | California-Engels vs. ArcelorMittal SA ADR | California-Engels vs. Summit Environmental | California-Engels vs. Century Aluminum |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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