Correlation Between Life Time and Freedom Bank
Can any of the company-specific risk be diversified away by investing in both Life Time and Freedom Bank 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 Freedom Bank 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 Freedom Bank of, you can compare the effects of market volatilities on Life Time and Freedom Bank 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 Freedom Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Freedom Bank.
Diversification Opportunities for Life Time and Freedom Bank
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Life and Freedom is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Freedom Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Bank 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 Freedom Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Bank has no effect on the direction of Life Time i.e., Life Time and Freedom Bank go up and down completely randomly.
Pair Corralation between Life Time and Freedom Bank
Considering the 90-day investment horizon Life Time Group is expected to generate 2.71 times more return on investment than Freedom Bank. However, Life Time is 2.71 times more volatile than Freedom Bank of. It trades about 0.06 of its potential returns per unit of risk. Freedom Bank of is currently generating about -0.01 per unit of risk. If you would invest 1,617 in Life Time Group on September 3, 2024 and sell it today you would earn a total of 779.00 from holding Life Time Group or generate 48.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.77% |
| Values | Daily Returns |
Life Time Group vs. Freedom Bank of
Performance |
| Timeline |
| Life Time Group |
| Freedom Bank |
Life Time and Freedom Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Freedom Bank
The main advantage of trading using opposite Life Time and Freedom Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Freedom Bank 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 Freedom Bank will offset losses from the drop in Freedom Bank's long position.| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Mattel Inc | Life Time vs. OneSpaWorld Holdings |
| Freedom Bank vs. Western Asset Global | Freedom Bank vs. Invesco Trust For | Freedom Bank vs. Logan Ridge Finance | Freedom Bank vs. Invesco Advantage MIT |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |