Correlation Between Life Time and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Life Time and Perseus Mining 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 Perseus Mining 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 Perseus Mining Limited, you can compare the effects of market volatilities on Life Time and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Perseus Mining.
Diversification Opportunities for Life Time and Perseus Mining
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Life and Perseus is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Life Time i.e., Life Time and Perseus Mining go up and down completely randomly.
Pair Corralation between Life Time and Perseus Mining
Considering the 90-day investment horizon Life Time Group is expected to generate 0.9 times more return on investment than Perseus Mining. However, Life Time Group is 1.12 times less risky than Perseus Mining. It trades about 0.06 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.03 per unit of risk. If you would invest 1,347 in Life Time Group on September 3, 2024 and sell it today you would earn a total of 1,080 from holding Life Time Group or generate 80.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.37% |
| Values | Daily Returns |
Life Time Group vs. Perseus Mining Limited
Performance |
| Timeline |
| Life Time Group |
| Perseus Mining |
Life Time and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Perseus Mining
The main advantage of trading using opposite Life Time and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness | Life Time vs. Mattel Inc |
| Perseus Mining vs. Harmony Gold Mining | Perseus Mining vs. SPACE | Perseus Mining vs. T Rowe Price | Perseus Mining vs. Ampleforth |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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