Correlation Between SBC Medical and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both SBC Medical 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 SBC Medical and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBC Medical Group and Lululemon Athletica, you can compare the effects of market volatilities on SBC Medical 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 SBC Medical with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBC Medical and Lululemon Athletica.
Diversification Opportunities for SBC Medical and Lululemon Athletica
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SBC and Lululemon is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SBC Medical Group and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and SBC Medical 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 SBC Medical Group 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 SBC Medical i.e., SBC Medical and Lululemon Athletica go up and down completely randomly.
Pair Corralation between SBC Medical and Lululemon Athletica
Assuming the 90 days horizon SBC Medical Group is expected to generate 5.3 times more return on investment than Lululemon Athletica. However, SBC Medical is 5.3 times more volatile than Lululemon Athletica. It trades about 0.18 of its potential returns per unit of risk. Lululemon Athletica is currently generating about 0.03 per unit of risk. If you would invest 7.31 in SBC Medical Group on October 25, 2024 and sell it today you would earn a total of 18.69 from holding SBC Medical Group or generate 255.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 17.44% |
| Values | Daily Returns |
SBC Medical Group vs. Lululemon Athletica
Performance |
| Timeline |
| SBC Medical Group |
| Lululemon Athletica |
SBC Medical and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBC Medical and Lululemon Athletica
The main advantage of trading using opposite SBC Medical and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBC Medical 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.| SBC Medical vs. 1 800 FLOWERSCOM | SBC Medical vs. Space Communication | SBC Medical vs. Asbury Automotive Group | SBC Medical vs. Reservoir Media |
| Lululemon Athletica vs. American Eagle Outfitters | Lululemon Athletica vs. Abercrombie Fitch | Lululemon Athletica vs. Urban Outfitters | Lululemon Athletica vs. Foot Locker |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |