Correlation Between Lululemon Athletica and Organic Sales
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and Organic Sales 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 Organic Sales into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and Organic Sales and, you can compare the effects of market volatilities on Lululemon Athletica and Organic Sales 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 Organic Sales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and Organic Sales.
Diversification Opportunities for Lululemon Athletica and Organic Sales
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lululemon and Organic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and Organic Sales and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Organic Sales 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 Organic Sales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Organic Sales has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and Organic Sales go up and down completely randomly.
Pair Corralation between Lululemon Athletica and Organic Sales
If you would invest 30,482 in Lululemon Athletica on August 30, 2024 and sell it today you would earn a total of 1,470 from holding Lululemon Athletica or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lululemon Athletica vs. Organic Sales and
Performance |
| Timeline |
| Lululemon Athletica |
| Organic Sales |
Lululemon Athletica and Organic Sales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and Organic Sales
The main advantage of trading using opposite Lululemon Athletica and Organic Sales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, Organic Sales 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 Organic Sales will offset losses from the drop in Organic Sales' long position.| Lululemon Athletica vs. American Eagle Outfitters | Lululemon Athletica vs. Abercrombie Fitch | Lululemon Athletica vs. Urban Outfitters | Lululemon Athletica vs. Foot Locker |
| Organic Sales vs. Alsea SAB de | Organic Sales vs. Marstons PLC | Organic Sales vs. Bagger Daves Burger | Organic Sales vs. Marstons 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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