Correlation Between ChampionX and Life Time
Can any of the company-specific risk be diversified away by investing in both ChampionX 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 ChampionX and Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Life Time Group, you can compare the effects of market volatilities on ChampionX 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 ChampionX with a short position of Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Life Time.
Diversification Opportunities for ChampionX and Life Time
Very weak diversification
The 3 months correlation between ChampionX and Life is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX 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 ChampionX 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 ChampionX 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 ChampionX i.e., ChampionX and Life Time go up and down completely randomly.
Pair Corralation between ChampionX and Life Time
Considering the 90-day investment horizon ChampionX is expected to generate 4.76 times less return on investment than Life Time. In addition to that, ChampionX is 1.29 times more volatile than Life Time Group. It trades about 0.11 of its total potential returns per unit of risk. Life Time Group is currently generating about 0.66 per unit of volatility. If you would invest 2,279 in Life Time Group on November 4, 2024 and sell it today you would earn a total of 620.00 from holding Life Time Group or generate 27.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Life Time Group
Performance |
| Timeline |
| ChampionX |
| Life Time Group |
ChampionX and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Life Time
The main advantage of trading using opposite ChampionX and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX 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.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness | Life Time vs. Mattel 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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