Correlation Between Lululemon Athletica and Nyxoah
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and Nyxoah 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 Nyxoah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and Nyxoah, you can compare the effects of market volatilities on Lululemon Athletica and Nyxoah 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 Nyxoah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and Nyxoah.
Diversification Opportunities for Lululemon Athletica and Nyxoah
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lululemon and Nyxoah is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and Nyxoah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyxoah 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 Nyxoah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nyxoah has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and Nyxoah go up and down completely randomly.
Pair Corralation between Lululemon Athletica and Nyxoah
Given the investment horizon of 90 days Lululemon Athletica is expected to generate 0.83 times more return on investment than Nyxoah. However, Lululemon Athletica is 1.21 times less risky than Nyxoah. It trades about 0.03 of its potential returns per unit of risk. Nyxoah is currently generating about -0.26 per unit of risk. If you would invest 31,813 in Lululemon Athletica on September 3, 2024 and sell it today you would earn a total of 253.00 from holding Lululemon Athletica or generate 0.8% 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. Nyxoah
Performance |
| Timeline |
| Lululemon Athletica |
| Nyxoah |
Lululemon Athletica and Nyxoah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and Nyxoah
The main advantage of trading using opposite Lululemon Athletica and Nyxoah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, Nyxoah 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 Nyxoah will offset losses from the drop in Nyxoah's long position.| Lululemon Athletica vs. American Eagle Outfitters | Lululemon Athletica vs. Abercrombie Fitch | Lululemon Athletica vs. Urban Outfitters | Lululemon Athletica vs. Foot Locker |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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