Correlation Between Life Time and Entravision Communications
Can any of the company-specific risk be diversified away by investing in both Life Time and Entravision Communications 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 Entravision Communications 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 Entravision Communications, you can compare the effects of market volatilities on Life Time and Entravision Communications 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 Entravision Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Entravision Communications.
Diversification Opportunities for Life Time and Entravision Communications
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Life and Entravision is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Entravision Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entravision Communications 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 Entravision Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entravision Communications has no effect on the direction of Life Time i.e., Life Time and Entravision Communications go up and down completely randomly.
Pair Corralation between Life Time and Entravision Communications
Considering the 90-day investment horizon Life Time Group is expected to generate 0.51 times more return on investment than Entravision Communications. However, Life Time Group is 1.95 times less risky than Entravision Communications. It trades about 0.18 of its potential returns per unit of risk. Entravision Communications is currently generating about 0.05 per unit of risk. If you would invest 2,300 in Life Time Group on August 29, 2024 and sell it today you would earn a total of 162.00 from holding Life Time Group or generate 7.04% 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. Entravision Communications
Performance |
| Timeline |
| Life Time Group |
| Entravision Communications |
Life Time and Entravision Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Entravision Communications
The main advantage of trading using opposite Life Time and Entravision Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Entravision Communications 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 Entravision Communications will offset losses from the drop in Entravision Communications' long position.| Life Time vs. Bowlero Corp | Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness |
| Entravision Communications vs. Marchex | Entravision Communications vs. Direct Digital Holdings | Entravision Communications vs. Cimpress NV | Entravision Communications vs. Townsquare Media |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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