Correlation Between Life Time and Peloton Interactive
Can any of the company-specific risk be diversified away by investing in both Life Time and Peloton Interactive 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 Peloton Interactive 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 Peloton Interactive, you can compare the effects of market volatilities on Life Time and Peloton Interactive 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 Peloton Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Peloton Interactive.
Diversification Opportunities for Life Time and Peloton Interactive
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Life and Peloton is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Peloton Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peloton Interactive 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 Peloton Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peloton Interactive has no effect on the direction of Life Time i.e., Life Time and Peloton Interactive go up and down completely randomly.
Pair Corralation between Life Time and Peloton Interactive
Considering the 90-day investment horizon Life Time Group is expected to generate 0.52 times more return on investment than Peloton Interactive. However, Life Time Group is 1.91 times less risky than Peloton Interactive. It trades about 0.06 of its potential returns per unit of risk. Peloton Interactive is currently generating about 0.02 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Life Time Group vs. Peloton Interactive
Performance |
| Timeline |
| Life Time Group |
| Peloton Interactive |
Life Time and Peloton Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Peloton Interactive
The main advantage of trading using opposite Life Time and Peloton Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Peloton Interactive 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 Peloton Interactive will offset losses from the drop in Peloton Interactive's long position.| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Mattel Inc | Life Time vs. OneSpaWorld Holdings |
| Peloton Interactive vs. Zoom Video Communications | Peloton Interactive vs. DocuSign | Peloton Interactive vs. Pinterest | Peloton Interactive vs. Teladoc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |