Correlation Between Oxford Industries and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Oxford Industries and Lululemon Athletica 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 Oxford Industries and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Industries and Lululemon Athletica, you can compare the effects of market volatilities on Oxford Industries and Lululemon Athletica 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 Oxford Industries with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Industries and Lululemon Athletica.
Diversification Opportunities for Oxford Industries and Lululemon Athletica
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oxford and Lululemon is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Industries and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Oxford Industries 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 Oxford Industries are associated (or correlated) with Lululemon Athletica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lululemon Athletica has no effect on the direction of Oxford Industries i.e., Oxford Industries and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Oxford Industries and Lululemon Athletica
Considering the 90-day investment horizon Oxford Industries is expected to generate 1.17 times less return on investment than Lululemon Athletica. But when comparing it to its historical volatility, Oxford Industries is 1.44 times less risky than Lululemon Athletica. It trades about 0.11 of its potential returns per unit of risk. Lululemon Athletica is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 30,415 in Lululemon Athletica on August 26, 2024 and sell it today you would earn a total of 1,296 from holding Lululemon Athletica or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Industries vs. Lululemon Athletica
Performance |
| Timeline |
| Oxford Industries |
| Lululemon Athletica |
Oxford Industries and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Industries and Lululemon Athletica
The main advantage of trading using opposite Oxford Industries and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Industries position performs unexpectedly, Lululemon Athletica 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 Lululemon Athletica will offset losses from the drop in Lululemon Athletica's long position.| Oxford Industries vs. G III Apparel Group | Oxford Industries vs. Ermenegildo Zegna NV | Oxford Industries vs. Kontoor Brands | Oxford Industries vs. Columbia Sportswear |
| Lululemon Athletica vs. VF Corporation | Lululemon Athletica vs. Levi Strauss Co | Lululemon Athletica vs. Under Armour A | Lululemon Athletica vs. Oxford Industries |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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