Correlation Between Lululemon Athletica and LithiumBank Resources
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and LithiumBank Resources 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 LithiumBank Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and LithiumBank Resources Corp, you can compare the effects of market volatilities on Lululemon Athletica and LithiumBank Resources 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 LithiumBank Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and LithiumBank Resources.
Diversification Opportunities for Lululemon Athletica and LithiumBank Resources
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lululemon and LithiumBank is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and LithiumBank Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LithiumBank Resources 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 LithiumBank Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LithiumBank Resources has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and LithiumBank Resources go up and down completely randomly.
Pair Corralation between Lululemon Athletica and LithiumBank Resources
Given the investment horizon of 90 days Lululemon Athletica is expected to generate 0.5 times more return on investment than LithiumBank Resources. However, Lululemon Athletica is 2.01 times less risky than LithiumBank Resources. It trades about 0.0 of its potential returns per unit of risk. LithiumBank Resources Corp is currently generating about -0.08 per unit of risk. If you would invest 36,040 in Lululemon Athletica on September 1, 2024 and sell it today you would lose (3,974) from holding Lululemon Athletica or give up 11.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lululemon Athletica vs. LithiumBank Resources Corp
Performance |
| Timeline |
| Lululemon Athletica |
| LithiumBank Resources |
Lululemon Athletica and LithiumBank Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and LithiumBank Resources
The main advantage of trading using opposite Lululemon Athletica and LithiumBank Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, LithiumBank Resources 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 LithiumBank Resources will offset losses from the drop in LithiumBank Resources' long position.| Lululemon Athletica vs. VF Corporation | Lululemon Athletica vs. Levi Strauss Co | Lululemon Athletica vs. Under Armour A | Lululemon Athletica vs. Columbia Sportswear |
| LithiumBank Resources vs. Qubec Nickel Corp | LithiumBank Resources vs. IGO Limited | LithiumBank Resources vs. Focus Graphite | LithiumBank Resources vs. Mineral Res |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |