Correlation Between Lulus Fashion and Reitmans (Canada)
Can any of the company-specific risk be diversified away by investing in both Lulus Fashion and Reitmans (Canada) 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 Lulus Fashion and Reitmans (Canada) into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lulus Fashion Lounge and Reitmans Limited, you can compare the effects of market volatilities on Lulus Fashion and Reitmans (Canada) 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 Lulus Fashion with a short position of Reitmans (Canada). Check out your portfolio center. Please also check ongoing floating volatility patterns of Lulus Fashion and Reitmans (Canada).
Diversification Opportunities for Lulus Fashion and Reitmans (Canada)
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lulus and Reitmans is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lulus Fashion Lounge and Reitmans Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitmans (Canada) and Lulus Fashion 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 Lulus Fashion Lounge are associated (or correlated) with Reitmans (Canada). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitmans (Canada) has no effect on the direction of Lulus Fashion i.e., Lulus Fashion and Reitmans (Canada) go up and down completely randomly.
Pair Corralation between Lulus Fashion and Reitmans (Canada)
Given the investment horizon of 90 days Lulus Fashion Lounge is expected to under-perform the Reitmans (Canada). In addition to that, Lulus Fashion is 22.44 times more volatile than Reitmans Limited. It trades about -0.07 of its total potential returns per unit of risk. Reitmans Limited is currently generating about -0.11 per unit of volatility. If you would invest 193.00 in Reitmans Limited on August 27, 2024 and sell it today you would lose (2.00) from holding Reitmans Limited or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lulus Fashion Lounge vs. Reitmans Limited
Performance |
| Timeline |
| Lulus Fashion Lounge |
| Reitmans (Canada) |
Lulus Fashion and Reitmans (Canada) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lulus Fashion and Reitmans (Canada)
The main advantage of trading using opposite Lulus Fashion and Reitmans (Canada) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lulus Fashion position performs unexpectedly, Reitmans (Canada) 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 Reitmans (Canada) will offset losses from the drop in Reitmans (Canada)'s long position.| Lulus Fashion vs. Citi Trends | Lulus Fashion vs. Tillys Inc | Lulus Fashion vs. Zumiez Inc | Lulus Fashion vs. JJill Inc |
| Reitmans (Canada) vs. Titan Logix Corp | Reitmans (Canada) vs. RediShred Capital Corp | Reitmans (Canada) vs. Hemisphere Energy | Reitmans (Canada) vs. BQE Water |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |