Correlation Between Canlan Ice and Life Time
Can any of the company-specific risk be diversified away by investing in both Canlan Ice 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 Canlan Ice and Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Life Time Group, you can compare the effects of market volatilities on Canlan Ice 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 Canlan Ice with a short position of Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Life Time.
Diversification Opportunities for Canlan Ice and Life Time
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canlan and Life is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports 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 Canlan Ice 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 Canlan Ice Sports 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 Canlan Ice i.e., Canlan Ice and Life Time go up and down completely randomly.
Pair Corralation between Canlan Ice and Life Time
Assuming the 90 days horizon Canlan Ice is expected to generate 2.83 times less return on investment than Life Time. But when comparing it to its historical volatility, Canlan Ice Sports is 13.15 times less risky than Life Time. It trades about 0.18 of its potential returns per unit of risk. Life Time Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,383 in Life Time Group on August 28, 2024 and sell it today you would earn a total of 86.00 from holding Life Time Group or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Life Time Group
Performance |
| Timeline |
| Canlan Ice Sports |
| Life Time Group |
Canlan Ice and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Life Time
The main advantage of trading using opposite Canlan Ice and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice 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.| Canlan Ice vs. HUMANA INC | Canlan Ice vs. Aquagold International | Canlan Ice vs. Barloworld Ltd ADR | Canlan Ice vs. Morningstar Unconstrained Allocation |
| Life Time vs. Bowlero Corp | Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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