Correlation Between Apex Global and Lululemon Athletica

Can any of the company-specific risk be diversified away by investing in both Apex Global 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 Apex Global and Lululemon Athletica into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apex Global Brands and Lululemon Athletica, you can compare the effects of market volatilities on Apex Global 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 Apex Global with a short position of Lululemon Athletica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apex Global and Lululemon Athletica.

Diversification Opportunities for Apex Global and Lululemon Athletica

0.0

Correlation Coefficient

Apex Global  Lululemon Athletica

Pay attention - limited upside

The 3 months correlation between Apex and Lululemon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Apex Global Brands and Lululemon Athletica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lululemon Athletica and Apex Global 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 Apex Global Brands 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 Apex Global i.e., Apex Global and Lululemon Athletica go up and down completely randomly.

Pair Corralation between Apex Global and Lululemon Athletica

If you would invest (100.00) in Apex Global Brands on February 5, 2024 and sell it today you would earn a total of  100.00  from holding Apex Global Brands or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Apex Global Brands  vs.  Lululemon Athletica

Apex Global Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apex Global Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Apex Global is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Lululemon Athletica

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lululemon Athletica has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Apex Global and Lululemon Athletica

The main advantage of trading using opposite Apex Global and Lululemon Athletica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apex Global 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.

The idea behind Apex Global Brands and Lululemon Athletica pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.