Correlation Between OneSpaWorld Holdings and Life Time
Can any of the company-specific risk be diversified away by investing in both OneSpaWorld Holdings and Life Time 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 OneSpaWorld Holdings and Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OneSpaWorld Holdings and Life Time Group, you can compare the effects of market volatilities on OneSpaWorld Holdings and Life Time 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 OneSpaWorld Holdings with a short position of Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSpaWorld Holdings and Life Time.
Diversification Opportunities for OneSpaWorld Holdings and Life Time
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OneSpaWorld and Life is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding OneSpaWorld Holdings and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time Group and OneSpaWorld Holdings 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 OneSpaWorld Holdings are associated (or correlated) with Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of OneSpaWorld Holdings i.e., OneSpaWorld Holdings and Life Time go up and down completely randomly.
Pair Corralation between OneSpaWorld Holdings and Life Time
Considering the 90-day investment horizon OneSpaWorld Holdings is expected to generate 2.76 times less return on investment than Life Time. But when comparing it to its historical volatility, OneSpaWorld Holdings is 1.26 times less risky than Life Time. It trades about 0.08 of its potential returns per unit of risk. Life Time Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,402 in Life Time Group on October 19, 2024 and sell it today you would earn a total of 365.00 from holding Life Time Group or generate 15.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OneSpaWorld Holdings vs. Life Time Group
Performance |
| Timeline |
| OneSpaWorld Holdings |
| Life Time Group |
OneSpaWorld Holdings and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSpaWorld Holdings and Life Time
The main advantage of trading using opposite OneSpaWorld Holdings and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSpaWorld Holdings position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time's long position.| OneSpaWorld Holdings vs. Escalade Incorporated | OneSpaWorld Holdings vs. Johnson Outdoors | OneSpaWorld Holdings vs. Clarus Corp | OneSpaWorld Holdings vs. Six Flags Entertainment |
| Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness | Life Time vs. Mattel Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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