Correlation Between Hurco Companies and Life Time

Can any of the company-specific risk be diversified away by investing in both Hurco Companies 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 Hurco Companies and Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hurco Companies and Life Time Group, you can compare the effects of market volatilities on Hurco Companies 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 Hurco Companies with a short position of Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and Life Time.

Diversification Opportunities for Hurco Companies and Life Time

0.4

Correlation Coefficient

Hurco Companies  Life Time

Very weak diversification

The 3 months correlation between Hurco and Life is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies 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 Hurco Companies 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 Hurco Companies 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 Hurco Companies i.e., Hurco Companies and Life Time go up and down completely randomly.

Pair Corralation between Hurco Companies and Life Time

Given the investment horizon of 90 days Hurco Companies is expected to under-perform the Life Time. In addition to that, Hurco Companies is 1.17 times more volatile than Life Time Group. It trades about -0.46 of its total potential returns per unit of risk. Life Time Group is currently generating about -0.28 per unit of volatility. If you would invest  2,427  in Life Time Group on September 29, 2024 and sell it today you would lose (235.00) from holding Life Time Group or give up 9.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Hurco Companies  vs.  Life Time Group

Hurco Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hurco Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Life Time Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Life Time Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Hurco Companies and Life Time

The main advantage of trading using opposite Hurco Companies and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies 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.

The idea behind Hurco Companies and Life Time Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.