Correlation Between Plby and Life Time
Can any of the company-specific risk be diversified away by investing in both Plby 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 Plby and Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plby Group and Life Time Group, you can compare the effects of market volatilities on Plby 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 Plby with a short position of Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plby and Life Time.
Diversification Opportunities for Plby and Life Time
Good diversification
The 3 months correlation between Plby and Life is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Plby Group 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 Plby 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 Plby Group 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 Plby i.e., Plby and Life Time go up and down completely randomly.
Pair Corralation between Plby and Life Time
Given the investment horizon of 90 days Plby Group is expected to generate 2.28 times more return on investment than Life Time. However, Plby is 2.28 times more volatile than Life Time Group. It trades about 0.02 of its potential returns per unit of risk. Life Time Group is currently generating about 0.03 per unit of risk. If you would invest 174.00 in Plby Group on September 4, 2024 and sell it today you would lose (31.00) from holding Plby Group or give up 17.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plby Group vs. Life Time Group
Performance |
| Timeline |
| Plby Group |
| Life Time Group |
Plby and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plby and Life Time
The main advantage of trading using opposite Plby and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plby 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.| Plby vs. Purecycle Technologies Holdings | Plby vs. Dolphin Entertainment | Plby vs. Hall of Fame | Plby vs. Funko Inc |
| Life Time vs. Hyatt Hotels | Life Time vs. Smart Share Global | Life Time vs. Sweetgreen | Life Time vs. Wyndham Hotels Resorts |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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