Correlation Between Getty Images and Lululemon Athletica
Can any of the company-specific risk be diversified away by investing in both Getty Images 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 Getty Images and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and Lululemon Athletica, you can compare the effects of market volatilities on Getty Images 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 Getty Images with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Lululemon Athletica.
Diversification Opportunities for Getty Images and Lululemon Athletica
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Getty and Lululemon is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Getty Images 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 Getty Images Holdings 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 Getty Images i.e., Getty Images and Lululemon Athletica go up and down completely randomly.
Pair Corralation between Getty Images and Lululemon Athletica
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Lululemon Athletica. But the stock apears to be less risky and, when comparing its historical volatility, Getty Images Holdings is 1.25 times less risky than Lululemon Athletica. The stock trades about -0.4 of its potential returns per unit of risk. The Lululemon Athletica is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 32,672 in Lululemon Athletica on September 25, 2024 and sell it today you would earn a total of 5,897 from holding Lululemon Athletica or generate 18.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Getty Images Holdings vs. Lululemon Athletica
Performance |
Timeline |
Getty Images Holdings |
Lululemon Athletica |
Getty Images and Lululemon Athletica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Getty Images and Lululemon Athletica
The main advantage of trading using opposite Getty Images and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images 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.Getty Images vs. Outbrain | Getty Images vs. Perion Network | Getty Images vs. Taboola Ltd Warrant | Getty Images vs. Fiverr International |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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