Correlation Between Life Time and Madison Square
Can any of the company-specific risk be diversified away by investing in both Life Time and Madison Square 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 Madison Square 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 Madison Square Garden, you can compare the effects of market volatilities on Life Time and Madison Square 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 Madison Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Madison Square.
Diversification Opportunities for Life Time and Madison Square
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Life and Madison is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Madison Square Garden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Square Garden 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 Madison Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Square Garden has no effect on the direction of Life Time i.e., Life Time and Madison Square go up and down completely randomly.
Pair Corralation between Life Time and Madison Square
Considering the 90-day investment horizon Life Time Group is expected to generate 0.7 times more return on investment than Madison Square. However, Life Time Group is 1.43 times less risky than Madison Square. It trades about 0.19 of its potential returns per unit of risk. Madison Square Garden is currently generating about -0.24 per unit of risk. If you would invest 2,300 in Life Time Group on August 28, 2024 and sell it today you would earn a total of 169.00 from holding Life Time Group or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Time Group vs. Madison Square Garden
Performance |
| Timeline |
| Life Time Group |
| Madison Square Garden |
Life Time and Madison Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Madison Square
The main advantage of trading using opposite Life Time and Madison Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Madison Square 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 Madison Square will offset losses from the drop in Madison Square's long position.| Life Time vs. Bowlero Corp | Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness |
| Madison Square vs. Madison Square Garden | Madison Square vs. Graham Holdings Co | Madison Square vs. Atlanta Braves Holdings, | Madison Square vs. Live Nation Entertainment |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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