Correlation Between Biglari Holdings and Life Time
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Life Time 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 Biglari Holdings and Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Life Time Group, you can compare the effects of market volatilities on Biglari Holdings and Life Time 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 Biglari Holdings with a short position of Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Life Time.
Diversification Opportunities for Biglari Holdings and Life Time
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Biglari and Life is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time Group and Biglari Holdings 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 Biglari Holdings are associated (or correlated) with Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Life Time go up and down completely randomly.
Pair Corralation between Biglari Holdings and Life Time
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.98 times more return on investment than Life Time. However, Biglari Holdings is 1.98 times more volatile than Life Time Group. It trades about 0.45 of its potential returns per unit of risk. Life Time Group is currently generating about -0.16 per unit of risk. If you would invest 17,453 in Biglari Holdings on September 12, 2024 and sell it today you would earn a total of 5,407 from holding Biglari Holdings or generate 30.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Life Time Group
Performance |
| Timeline |
| Biglari Holdings |
| Life Time Group |
Biglari Holdings and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Life Time
The main advantage of trading using opposite Biglari Holdings and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time's long position.| Biglari Holdings vs. Noble Romans | Biglari Holdings vs. Good Times Restaurants | Biglari Holdings vs. Flanigans Enterprises | Biglari Holdings vs. FAT Brands |
| Life Time vs. Planet Fitness | Life Time vs. Bowlero Corp | Life Time vs. JAKKS Pacific | Life Time vs. Acushnet Holdings Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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