Correlation Between Life Time and Neogen
Can any of the company-specific risk be diversified away by investing in both Life Time and Neogen 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 Neogen 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 Neogen, you can compare the effects of market volatilities on Life Time and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Neogen.
Diversification Opportunities for Life Time and Neogen
Modest diversification
The 3 months correlation between Life and Neogen is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Life Time i.e., Life Time and Neogen go up and down completely randomly.
Pair Corralation between Life Time and Neogen
Considering the 90-day investment horizon Life Time Group is expected to generate 1.05 times more return on investment than Neogen. However, Life Time is 1.05 times more volatile than Neogen. It trades about 0.06 of its potential returns per unit of risk. Neogen is currently generating about 0.0 per unit of risk. If you would invest 1,185 in Life Time Group on September 14, 2024 and sell it today you would earn a total of 1,128 from holding Life Time Group or generate 95.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Time Group vs. Neogen
Performance |
| Timeline |
| Life Time Group |
| Neogen |
Life Time and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Neogen
The main advantage of trading using opposite Life Time and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| Life Time vs. Bowlero Corp | Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness |
| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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