Correlation Between Life Time and Cowen

Can any of the company-specific risk be diversified away by investing in both Life Time and Cowen 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 Cowen 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 Cowen Group, you can compare the effects of market volatilities on Life Time and Cowen 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 Cowen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and Cowen.

Diversification Opportunities for Life Time and Cowen

-0.43

Correlation Coefficient

Life Time  Cowen

Very good diversification

The 3 months correlation between Life and Cowen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Cowen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cowen Group 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 Cowen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cowen Group has no effect on the direction of Life Time i.e., Life Time and Cowen go up and down completely randomly.

Pair Corralation between Life Time and Cowen

If you would invest  1,533  in Life Time Group on September 26, 2024 and sell it today you would earn a total of  685.00  from holding Life Time Group or generate 44.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.32%
Values	Daily Returns

Life Time Group  vs.  Cowen Group

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.

Cowen Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cowen Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cowen is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Life Time and Cowen

The main advantage of trading using opposite Life Time and Cowen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Time position performs unexpectedly, Cowen 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 Cowen will offset losses from the drop in Cowen's long position.

The idea behind Life Time Group and Cowen 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.