Correlation Between Summa Silver and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Summa Silver 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 Summa Silver and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summa Silver Corp and Lululemon Athletica, you can compare the effects of market volatilities on Summa Silver 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 Summa Silver with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summa Silver and Lululemon Athletica.
Diversification Opportunities for Summa Silver and Lululemon Athletica
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Summa and Lululemon is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Summa Silver Corp and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Summa Silver 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 Summa Silver Corp 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 Summa Silver i.e., Summa Silver and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Summa Silver and Lululemon Athletica
Assuming the 90 days horizon Summa Silver Corp is expected to under-perform the Lululemon Athletica. In addition to that, Summa Silver is 1.47 times more volatile than Lululemon Athletica. It trades about -0.1 of its total potential returns per unit of risk. Lululemon Athletica is currently generating about 0.25 per unit of volatility. If you would invest 26,014 in Lululemon Athletica on September 12, 2024 and sell it today you would earn a total of 14,222 from holding Lululemon Athletica or generate 54.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Summa Silver Corp vs. Lululemon Athletica
Performance |
| Timeline |
| Summa Silver Corp |
| Lululemon Athletica |
Summa Silver and Lululemon Athletica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summa Silver and Lululemon Athletica
The main advantage of trading using opposite Summa Silver and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summa Silver 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.| Summa Silver vs. P2 Gold | Summa Silver vs. Enduro Metals | Summa Silver vs. Kodiak Copper Corp | Summa Silver vs. Mirasol Resources |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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