Correlation Between Life Time and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Life Time and KVH Industries 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 KVH Industries 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 KVH Industries, you can compare the effects of market volatilities on Life Time and KVH Industries 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 KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and KVH Industries.
Diversification Opportunities for Life Time and KVH Industries
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Life and KVH is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries 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 KVH Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KVH Industries has no effect on the direction of Life Time i.e., Life Time and KVH Industries go up and down completely randomly.
Pair Corralation between Life Time and KVH Industries
Considering the 90-day investment horizon Life Time Group is expected to generate 1.12 times more return on investment than KVH Industries. However, Life Time is 1.12 times more volatile than KVH Industries. It trades about 0.05 of its potential returns per unit of risk. KVH Industries is currently generating about 0.02 per unit of risk. If you would invest 1,665 in Life Time Group on September 12, 2024 and sell it today you would earn a total of 690.00 from holding Life Time Group or generate 41.44% 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. KVH Industries
Performance |
| Timeline |
| Life Time Group |
| KVH Industries |
Life Time and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and KVH Industries
The main advantage of trading using opposite Life Time and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, KVH Industries 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 KVH Industries will offset losses from the drop in KVH Industries' long position.| Life Time vs. Planet Fitness | Life Time vs. Bowlero Corp | Life Time vs. JAKKS Pacific | Life Time vs. Acushnet Holdings Corp |
| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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