Correlation Between Jack In and Life Time

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

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

Diversification Opportunities for Jack In and Life Time

-0.52

Correlation Coefficient

Jack In  Life Time

Excellent diversification

The 3 months correlation between Jack and Life is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Jack In The 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 Jack In 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 Jack In The 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 Jack In i.e., Jack In and Life Time go up and down completely randomly.

Pair Corralation between Jack In and Life Time

Given the investment horizon of 90 days Jack In The is expected to under-perform the Life Time. In addition to that, Jack In is 1.6 times more volatile than Life Time Group. It trades about 0.0 of its total potential returns per unit of risk. Life Time Group is currently generating about 0.25 per unit of volatility. If you would invest  2,228  in Life Time Group on September 1, 2024 and sell it today you would earn a total of  199.00  from holding Life Time Group or generate 8.93% return on investment over 90 days.

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

Jack In The  vs.  Life Time Group

Jack In

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jack In The are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Jack In is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Life Time Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Life Time Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Life Time is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Jack In and Life Time

The main advantage of trading using opposite Jack In and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack In 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 Jack In The 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 Transaction History module to view history of all your transactions and understand their impact on performance.