Correlation Between Life Time and Bluerock Homes
Can any of the company-specific risk be diversified away by investing in both Life Time and Bluerock Homes 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 Life Time and Bluerock Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Time Group and Bluerock Homes Trust, you can compare the effects of market volatilities on Life Time and Bluerock Homes 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 Life Time with a short position of Bluerock Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Bluerock Homes.
Diversification Opportunities for Life Time and Bluerock Homes
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Life and Bluerock is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Bluerock Homes Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Homes Trust and Life Time 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 Life Time Group are associated (or correlated) with Bluerock Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Homes Trust has no effect on the direction of Life Time i.e., Life Time and Bluerock Homes go up and down completely randomly.
Pair Corralation between Life Time and Bluerock Homes
Considering the 90-day investment horizon Life Time Group is expected to generate 0.99 times more return on investment than Bluerock Homes. However, Life Time Group is 1.01 times less risky than Bluerock Homes. It trades about 0.14 of its potential returns per unit of risk. Bluerock Homes Trust is currently generating about -0.06 per unit of risk. If you would invest 1,727 in Life Time Group on September 1, 2024 and sell it today you would earn a total of 700.00 from holding Life Time Group or generate 40.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Time Group vs. Bluerock Homes Trust
Performance |
| Timeline |
| Life Time Group |
| Bluerock Homes Trust |
Life Time and Bluerock Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Bluerock Homes
The main advantage of trading using opposite Life Time and Bluerock Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Bluerock Homes 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 Bluerock Homes will offset losses from the drop in Bluerock Homes' long position.| Life Time vs. The Wendys Co | Life Time vs. Shake Shack | Life Time vs. Papa Johns International | Life Time vs. Darden Restaurants |
| Bluerock Homes vs. Re Max Holding | Bluerock Homes vs. Marcus Millichap | Bluerock Homes vs. Frp Holdings Ord | Bluerock Homes vs. Maui Land Pineapple |
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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