Correlation Between Life Time and Sunedison
Can any of the company-specific risk be diversified away by investing in both Life Time and Sunedison 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 Sunedison 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 Sunedison, you can compare the effects of market volatilities on Life Time and Sunedison 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 Sunedison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Sunedison.
Diversification Opportunities for Life Time and Sunedison
Weak diversification
The 3 months correlation between Life and Sunedison is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Sunedison in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunedison 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 Sunedison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunedison has no effect on the direction of Life Time i.e., Life Time and Sunedison go up and down completely randomly.
Pair Corralation between Life Time and Sunedison
Considering the 90-day investment horizon Life Time Group is expected to generate 0.16 times more return on investment than Sunedison. However, Life Time Group is 6.27 times less risky than Sunedison. It trades about 0.08 of its potential returns per unit of risk. Sunedison is currently generating about -0.06 per unit of risk. If you would invest 1,509 in Life Time Group on September 14, 2024 and sell it today you would earn a total of 785.00 from holding Life Time Group or generate 52.02% 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. Sunedison
Performance |
| Timeline |
| Life Time Group |
| Sunedison |
Life Time and Sunedison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Time and Sunedison
The main advantage of trading using opposite Life Time and Sunedison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Sunedison 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 Sunedison will offset losses from the drop in Sunedison's long position.| Life Time vs. Bowlero Corp | Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness |
| Sunedison vs. Asure Software | Sunedison vs. BCE Inc | Sunedison vs. Sphere Entertainment Co | Sunedison vs. Digi International |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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