Correlation Between Life Time and Six Flags
Can any of the company-specific risk be diversified away by investing in both Life Time and Six Flags 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 Six Flags 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 Six Flags Entertainment, you can compare the effects of market volatilities on Life Time and Six Flags 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 Six Flags. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Six Flags.
Diversification Opportunities for Life Time and Six Flags
Good diversification
The 3 months correlation between Life and Six is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Six Flags Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Flags Entertainment 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 Six Flags. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Flags Entertainment has no effect on the direction of Life Time i.e., Life Time and Six Flags go up and down completely randomly.
Pair Corralation between Life Time and Six Flags
Considering the 90-day investment horizon Life Time is expected to generate 1.04 times less return on investment than Six Flags. In addition to that, Life Time is 1.21 times more volatile than Six Flags Entertainment. It trades about 0.09 of its total potential returns per unit of risk. Six Flags Entertainment is currently generating about 0.11 per unit of volatility. If you would invest 2,360 in Six Flags Entertainment on August 24, 2024 and sell it today you would earn a total of 840.00 from holding Six Flags Entertainment or generate 35.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.6% |
| Values | Daily Returns |
Life Time Group vs. Six Flags Entertainment
Performance |
| Timeline |
| Life Time Group |
| Six Flags Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Life Time and Six Flags Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Six Flags
The main advantage of trading using opposite Life Time and Six Flags positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Six Flags 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 Six Flags will offset losses from the drop in Six Flags' long position.| Life Time vs. Bowlero Corp | Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness |
| Six Flags vs. JAKKS Pacific | Six Flags vs. OneSpaWorld Holdings | Six Flags vs. Clarus Corp | Six Flags vs. Six Flags 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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