Correlation Between First Ship and Life Time
Can any of the company-specific risk be diversified away by investing in both First Ship 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 First Ship and Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and Life Time Group, you can compare the effects of market volatilities on First Ship 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 First Ship with a short position of Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and Life Time.
Diversification Opportunities for First Ship and Life Time
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Life is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease 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 First Ship 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 First Ship Lease 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 First Ship i.e., First Ship and Life Time go up and down completely randomly.
Pair Corralation between First Ship and Life Time
Assuming the 90 days horizon First Ship Lease is expected to generate 1.54 times more return on investment than Life Time. However, First Ship is 1.54 times more volatile than Life Time Group. It trades about 0.06 of its potential returns per unit of risk. Life Time Group is currently generating about 0.09 per unit of risk. If you would invest 2.50 in First Ship Lease on August 31, 2024 and sell it today you would earn a total of 1.50 from holding First Ship Lease or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
First Ship Lease vs. Life Time Group
Performance |
| Timeline |
| First Ship Lease |
| Life Time Group |
First Ship and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ship and Life Time
The main advantage of trading using opposite First Ship and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship 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.| First Ship vs. United Rentals | First Ship vs. Ashtead Gro | First Ship vs. Ashtead Group plc | First Ship vs. AerCap Holdings NV |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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