Correlation Between Lululemon Athletica and Country Garden
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and Country Garden 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 Country Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and Country Garden Holdings, you can compare the effects of market volatilities on Lululemon Athletica and Country Garden 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 Country Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and Country Garden.
Diversification Opportunities for Lululemon Athletica and Country Garden
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lululemon and Country is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and Country Garden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Garden Holdings 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 Country Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Garden Holdings has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and Country Garden go up and down completely randomly.
Pair Corralation between Lululemon Athletica and Country Garden
Given the investment horizon of 90 days Lululemon Athletica is expected to generate 3.14 times more return on investment than Country Garden. However, Lululemon Athletica is 3.14 times more volatile than Country Garden Holdings. It trades about 0.24 of its potential returns per unit of risk. Country Garden Holdings is currently generating about 0.21 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 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lululemon Athletica vs. Country Garden Holdings
Performance |
| Timeline |
| Lululemon Athletica |
| Country Garden Holdings |
Lululemon Athletica and Country Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and Country Garden
The main advantage of trading using opposite Lululemon Athletica and Country Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, Country Garden 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 Country Garden will offset losses from the drop in Country Garden'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 |
| Country Garden vs. Sweetgreen | Country Garden vs. Cannae Holdings | Country Garden vs. Mativ Holdings | Country Garden vs. Luxfer Holdings PLC |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |