Correlation Between Life Time and ECGI Holdings
Can any of the company-specific risk be diversified away by investing in both Life Time and ECGI Holdings 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 ECGI Holdings 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 ECGI Holdings, you can compare the effects of market volatilities on Life Time and ECGI Holdings 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 ECGI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and ECGI Holdings.
Diversification Opportunities for Life Time and ECGI Holdings
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Life and ECGI is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and ECGI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECGI Holdings 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 ECGI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECGI Holdings has no effect on the direction of Life Time i.e., Life Time and ECGI Holdings go up and down completely randomly.
Pair Corralation between Life Time and ECGI Holdings
Considering the 90-day investment horizon Life Time Group is expected to under-perform the ECGI Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Life Time Group is 1.97 times less risky than ECGI Holdings. The stock trades about -0.15 of its potential returns per unit of risk. The ECGI Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.09 in ECGI Holdings on January 4, 2025 and sell it today you would earn a total of 0.00 from holding ECGI Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Time Group vs. ECGI Holdings
Performance |
| Timeline |
| Life Time Group |
| ECGI Holdings |
Life Time and ECGI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and ECGI Holdings
The main advantage of trading using opposite Life Time and ECGI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, ECGI Holdings 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 ECGI Holdings will offset losses from the drop in ECGI Holdings' long position.| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness | Life Time vs. Mattel Inc |
| ECGI Holdings vs. LB Foster | ECGI Holdings vs. flyExclusive, | ECGI Holdings vs. Hafnia Limited | ECGI Holdings vs. Constellation Brands Class |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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