Correlation Between Lululemon Athletica and Chicos FAS
Can any of the company-specific risk be diversified away by investing in both Lululemon Athletica and Chicos FAS 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 Chicos FAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lululemon Athletica and Chicos FAS, you can compare the effects of market volatilities on Lululemon Athletica and Chicos FAS 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 Chicos FAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lululemon Athletica and Chicos FAS.
Diversification Opportunities for Lululemon Athletica and Chicos FAS
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lululemon and Chicos is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lululemon Athletica and Chicos FAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicos FAS 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 Chicos FAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicos FAS has no effect on the direction of Lululemon Athletica i.e., Lululemon Athletica and Chicos FAS go up and down completely randomly.
Pair Corralation between Lululemon Athletica and Chicos FAS
If you would invest 759.00 in Chicos FAS on January 24, 2024 and sell it today you would earn a total of 0.00 from holding Chicos FAS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lululemon Athletica vs. Chicos FAS
Performance |
| Timeline |
| Lululemon Athletica |
| Chicos FAS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lululemon Athletica and Chicos FAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lululemon Athletica and Chicos FAS
The main advantage of trading using opposite Lululemon Athletica and Chicos FAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lululemon Athletica position performs unexpectedly, Chicos FAS 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 Chicos FAS will offset losses from the drop in Chicos FAS's long position.| Lululemon Athletica vs. Signet Jewelers | Lululemon Athletica vs. TheRealReal | Lululemon Athletica vs. Envela Corp |
| Chicos FAS vs. Citi Trends | Chicos FAS vs. JJill Inc | Chicos FAS vs. Zumiez Inc | Chicos FAS vs. Tillys 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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