Correlation Between Lululemon Athletica and Asure Software
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and Asure Software 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 Lululemon Athletica and Asure Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and Asure Software, you can compare the effects of market volatilities on Lululemon Athletica and Asure Software 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 Lululemon Athletica with a short position of Asure Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and Asure Software.
Diversification Opportunities for Lululemon Athletica and Asure Software
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lululemon and Asure is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and Asure Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asure Software and Lululemon Athletica 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 Lululemon Athletica are associated (or correlated) with Asure Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asure Software has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and Asure Software go up and down completely randomly.
Pair Corralation between Lululemon Athletica and Asure Software
Given the investment horizon of 90 days Lululemon Athletica is expected to generate 0.95 times more return on investment than Asure Software. However, Lululemon Athletica is 1.05 times less risky than Asure Software. It trades about 0.21 of its potential returns per unit of risk. Asure Software is currently generating about 0.0 per unit of risk. If you would invest 25,980 in Lululemon Athletica on September 23, 2024 and sell it today you would earn a total of 11,962 from holding Lululemon Athletica or generate 46.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lululemon Athletica vs. Asure Software
Performance |
Timeline |
Lululemon Athletica |
Asure Software |
Lululemon Athletica and Asure Software Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lululemon Athletica and Asure Software
The main advantage of trading using opposite Lululemon Athletica and Asure Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, Asure Software 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 Asure Software will offset losses from the drop in Asure Software's long position.Lululemon Athletica vs. Amer Sports, | Lululemon Athletica vs. Brunswick | Lululemon Athletica vs. BRP Inc | Lululemon Athletica vs. Twin Vee Powercats |
Asure Software vs. Dubber Limited | Asure Software vs. Advanced Health Intelligence | Asure Software vs. Danavation Technologies Corp | Asure Software vs. BASE Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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