Correlation Between Sellas Life and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Sellas Life 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 Sellas Life and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sellas Life Sciences and Lululemon Athletica, you can compare the effects of market volatilities on Sellas Life 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 Sellas Life with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Lululemon Athletica.
Diversification Opportunities for Sellas Life and Lululemon Athletica
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sellas and Lululemon is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Sellas Life 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 Sellas Life Sciences 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 Sellas Life i.e., Sellas Life and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Sellas Life and Lululemon Athletica
Considering the 90-day investment horizon Sellas Life Sciences is expected to under-perform the Lululemon Athletica. In addition to that, Sellas Life is 1.26 times more volatile than Lululemon Athletica. It trades about -0.05 of its total potential returns per unit of risk. Lululemon Athletica is currently generating about 0.09 per unit of volatility. If you would invest 30,482 in Lululemon Athletica on August 30, 2024 and sell it today you would earn a total of 1,470 from holding Lululemon Athletica or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sellas Life Sciences vs. Lululemon Athletica
Performance |
| Timeline |
| Sellas Life Sciences |
| Lululemon Athletica |
Sellas Life and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Lululemon Athletica
The main advantage of trading using opposite Sellas Life and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life 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.| Sellas Life vs. NLS Pharmaceutics AG | Sellas Life vs. Mereo BioPharma Group | Sellas Life vs. Day One Biopharmaceuticals | Sellas Life vs. Reviva Pharmaceuticals Holdings |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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