Correlation Between Lululemon Athletica and SolarWorld Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and SolarWorld Aktiengesellschaft, you can compare the effects of market volatilities on Lululemon Athletica and SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and SolarWorld Aktiengesellscha.
Diversification Opportunities for Lululemon Athletica and SolarWorld Aktiengesellscha
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lululemon and SolarWorld is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and SolarWorld Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarWorld Aktiengesellscha has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and SolarWorld Aktiengesellscha go up and down completely randomly.
Pair Corralation between Lululemon Athletica and SolarWorld Aktiengesellscha
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 Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lululemon Athletica vs. SolarWorld Aktiengesellschaft
Performance |
| Timeline |
| Lululemon Athletica |
| SolarWorld Aktiengesellscha |
Lululemon Athletica and SolarWorld Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and SolarWorld Aktiengesellscha
The main advantage of trading using opposite Lululemon Athletica and SolarWorld Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha will offset losses from the drop in SolarWorld Aktiengesellscha'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 |
| SolarWorld Aktiengesellscha vs. Origin Materials | SolarWorld Aktiengesellscha vs. Eastman Chemical | SolarWorld Aktiengesellscha vs. Park Electrochemical | SolarWorld Aktiengesellscha vs. Allient |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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