Correlation Between Life Time and JAKKS Pacific
Can any of the company-specific risk be diversified away by investing in both Life Time and JAKKS Pacific 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 JAKKS Pacific 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 JAKKS Pacific, you can compare the effects of market volatilities on Life Time and JAKKS Pacific 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 JAKKS Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and JAKKS Pacific.
Diversification Opportunities for Life Time and JAKKS Pacific
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Life and JAKKS is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and JAKKS Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAKKS Pacific 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 JAKKS Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAKKS Pacific has no effect on the direction of Life Time i.e., Life Time and JAKKS Pacific go up and down completely randomly.
Pair Corralation between Life Time and JAKKS Pacific
Considering the 90-day investment horizon Life Time is expected to generate 1.03 times less return on investment than JAKKS Pacific. But when comparing it to its historical volatility, Life Time Group is 2.2 times less risky than JAKKS Pacific. It trades about 0.19 of its potential returns per unit of risk. JAKKS Pacific is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,658 in JAKKS Pacific on August 28, 2024 and sell it today you would earn a total of 167.00 from holding JAKKS Pacific or generate 6.28% 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. JAKKS Pacific
Performance |
| Timeline |
| Life Time Group |
| JAKKS Pacific |
Life Time and JAKKS Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and JAKKS Pacific
The main advantage of trading using opposite Life Time and JAKKS Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, JAKKS Pacific 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 JAKKS Pacific will offset losses from the drop in JAKKS Pacific's long position.| Life Time vs. Bowlero Corp | Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness |
| JAKKS Pacific vs. Escalade Incorporated | JAKKS Pacific vs. Clarus Corp | JAKKS Pacific vs. Six Flags Entertainment | JAKKS Pacific vs. American Outdoor Brands |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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