Correlation Between Life Time and Sacks Parente
Can any of the company-specific risk be diversified away by investing in both Life Time and Sacks Parente 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 Sacks Parente 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 Sacks Parente Golf,, you can compare the effects of market volatilities on Life Time and Sacks Parente 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 Sacks Parente. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Sacks Parente.
Diversification Opportunities for Life Time and Sacks Parente
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Life and Sacks is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Sacks Parente Golf, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sacks Parente Golf, 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 Sacks Parente. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sacks Parente Golf, has no effect on the direction of Life Time i.e., Life Time and Sacks Parente go up and down completely randomly.
Pair Corralation between Life Time and Sacks Parente
Considering the 90-day investment horizon Life Time Group is expected to generate 0.29 times more return on investment than Sacks Parente. However, Life Time Group is 3.49 times less risky than Sacks Parente. It trades about 0.16 of its potential returns per unit of risk. Sacks Parente Golf, is currently generating about -0.05 per unit of risk. If you would invest 1,478 in Life Time Group on September 3, 2024 and sell it today you would earn a total of 949.00 from holding Life Time Group or generate 64.21% 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. Sacks Parente Golf,
Performance |
| Timeline |
| Life Time Group |
| Sacks Parente Golf, |
Life Time and Sacks Parente Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Sacks Parente
The main advantage of trading using opposite Life Time and Sacks Parente positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Sacks Parente 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 Sacks Parente will offset losses from the drop in Sacks Parente's long position.| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Mattel Inc | Life Time vs. OneSpaWorld Holdings |
| Sacks Parente vs. Funko Inc | Sacks Parente vs. Madison Square Garden | Sacks Parente vs. Life Time Group | Sacks Parente 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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