Correlation Between Lululemon Athletica and CIGNA
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By analyzing existing cross correlation between Lululemon Athletica and CIGNA P, you can compare the effects of market volatilities on Lululemon Athletica and CIGNA 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 CIGNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and CIGNA.
Diversification Opportunities for Lululemon Athletica and CIGNA
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lululemon and CIGNA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and CIGNA P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIGNA P 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 CIGNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIGNA P has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and CIGNA go up and down completely randomly.
Pair Corralation between Lululemon Athletica and CIGNA
Given the investment horizon of 90 days Lululemon Athletica is expected to generate 7.02 times more return on investment than CIGNA. However, Lululemon Athletica is 7.02 times more volatile than CIGNA P. It trades about 0.01 of its potential returns per unit of risk. CIGNA P is currently generating about 0.0 per unit of risk. If you would invest 32,627 in Lululemon Athletica on September 3, 2024 and sell it today you would lose (561.00) from holding Lululemon Athletica or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lululemon Athletica vs. CIGNA P
Performance |
| Timeline |
| Lululemon Athletica |
| CIGNA P |
Lululemon Athletica and CIGNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and CIGNA
The main advantage of trading using opposite Lululemon Athletica and CIGNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, CIGNA 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 CIGNA will offset losses from the drop in CIGNA's long position.| Lululemon Athletica vs. American Eagle Outfitters | Lululemon Athletica vs. Abercrombie Fitch | Lululemon Athletica vs. Urban Outfitters | Lululemon Athletica vs. Foot Locker |
| CIGNA vs. Asbury Automotive Group | CIGNA vs. Lululemon Athletica | CIGNA vs. Fast Retailing Co | CIGNA vs. Tradeweb Markets |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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