Correlation Between Lululemon Athletica and Nutrition Management
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and Nutrition Management 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 Nutrition Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and Nutrition Management Services, you can compare the effects of market volatilities on Lululemon Athletica and Nutrition Management 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 Nutrition Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and Nutrition Management.
Diversification Opportunities for Lululemon Athletica and Nutrition Management
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lululemon and Nutrition is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and Nutrition Management Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrition Management 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 Nutrition Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrition Management has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and Nutrition Management go up and down completely randomly.
Pair Corralation between Lululemon Athletica and Nutrition Management
Given the investment horizon of 90 days Lululemon Athletica is expected to generate 0.43 times more return on investment than Nutrition Management. However, Lululemon Athletica is 2.33 times less risky than Nutrition Management. It trades about -0.03 of its potential returns per unit of risk. Nutrition Management Services is currently generating about -0.06 per unit of risk. If you would invest 50,163 in Lululemon Athletica on September 12, 2024 and sell it today you would lose (10,453) from holding Lululemon Athletica or give up 20.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lululemon Athletica vs. Nutrition Management Services
Performance |
| Timeline |
| Lululemon Athletica |
| Nutrition Management |
Lululemon Athletica and Nutrition Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and Nutrition Management
The main advantage of trading using opposite Lululemon Athletica and Nutrition Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, Nutrition Management 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 Nutrition Management will offset losses from the drop in Nutrition Management's long position.| Lululemon Athletica vs. American Eagle Outfitters | Lululemon Athletica vs. Abercrombie Fitch | Lululemon Athletica vs. Urban Outfitters | Lululemon Athletica vs. Foot Locker |
| Nutrition Management vs. Tandy Leather Factory | Nutrition Management vs. Aerofoam Metals | Nutrition Management vs. The Gap, | Nutrition Management vs. Lululemon Athletica |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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