Correlation Between Life Time and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Life Time and Compania Cervecerias 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 Compania Cervecerias 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 Compania Cervecerias Unidas, you can compare the effects of market volatilities on Life Time and Compania Cervecerias 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 Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Compania Cervecerias.
Diversification Opportunities for Life Time and Compania Cervecerias
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Life and Compania is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias 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 Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of Life Time i.e., Life Time and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Life Time and Compania Cervecerias
Considering the 90-day investment horizon Life Time Group is expected to under-perform the Compania Cervecerias. In addition to that, Life Time is 1.42 times more volatile than Compania Cervecerias Unidas. It trades about -0.2 of its total potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.37 per unit of volatility. If you would invest 1,088 in Compania Cervecerias Unidas on September 12, 2024 and sell it today you would earn a total of 94.50 from holding Compania Cervecerias Unidas or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Time Group vs. Compania Cervecerias Unidas
Performance |
| Timeline |
| Life Time Group |
| Compania Cervecerias |
Life Time and Compania Cervecerias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Compania Cervecerias
The main advantage of trading using opposite Life Time and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.| Life Time vs. Planet Fitness | Life Time vs. Bowlero Corp | Life Time vs. JAKKS Pacific | Life Time vs. Acushnet Holdings Corp |
| Compania Cervecerias vs. Fomento Economico Mexicano | Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Carlsberg AS | Compania Cervecerias vs. Molson Coors Beverage |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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