Correlation Between Life Time and Clarus Corp
Can any of the company-specific risk be diversified away by investing in both Life Time and Clarus Corp 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 Clarus Corp 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 Clarus Corp, you can compare the effects of market volatilities on Life Time and Clarus Corp 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 Clarus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Clarus Corp.
Diversification Opportunities for Life Time and Clarus Corp
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Life and Clarus is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Clarus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarus Corp 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 Clarus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarus Corp has no effect on the direction of Life Time i.e., Life Time and Clarus Corp go up and down completely randomly.
Pair Corralation between Life Time and Clarus Corp
Considering the 90-day investment horizon Life Time Group is expected to generate 0.7 times more return on investment than Clarus Corp. However, Life Time Group is 1.42 times less risky than Clarus Corp. It trades about 0.14 of its potential returns per unit of risk. Clarus Corp is currently generating about 0.0 per unit of risk. If you would invest 1,367 in Life Time Group on November 4, 2024 and sell it today you would earn a total of 1,532 from holding Life Time Group or generate 112.07% 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. Clarus Corp
Performance |
| Timeline |
| Life Time Group |
| Clarus Corp |
Life Time and Clarus Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Clarus Corp
The main advantage of trading using opposite Life Time and Clarus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Clarus Corp 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 Clarus Corp will offset losses from the drop in Clarus Corp's long position.| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness | Life Time vs. Mattel Inc |
| Clarus Corp vs. Johnson Outdoors | Clarus Corp vs. Escalade Incorporated | Clarus Corp vs. JAKKS Pacific | Clarus Corp vs. Six Flags Entertainment |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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