Correlation Between Life Time and DANBNK

Can any of the company-specific risk be diversified away by investing in both Life Time and DANBNK 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 DANBNK 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 DANBNK 6466 09 JAN 26, you can compare the effects of market volatilities on Life Time and DANBNK 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 DANBNK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Time and DANBNK.

Diversification Opportunities for Life Time and DANBNK

0.01

Correlation Coefficient

Life Time  DANBNK

Significant diversification

The 3 months correlation between Life and DANBNK is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and DANBNK 6466 09 JAN 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DANBNK 6466 09 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 DANBNK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DANBNK 6466 09 has no effect on the direction of Life Time i.e., Life Time and DANBNK go up and down completely randomly.

Pair Corralation between Life Time and DANBNK

Considering the 90-day investment horizon Life Time Group is expected to under-perform the DANBNK. In addition to that, Life Time is 12.64 times more volatile than DANBNK 6466 09 JAN 26. It trades about -0.05 of its total potential returns per unit of risk. DANBNK 6466 09 JAN 26 is currently generating about 0.02 per unit of volatility. If you would invest  10,043  in DANBNK 6466 09 JAN 26 on September 16, 2024 and sell it today you would earn a total of  8.00  from holding DANBNK 6466 09 JAN 26 or generate 0.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	38.46%
Values	Daily Returns

Life Time Group  vs.  DANBNK 6466 09 JAN 26

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 fairly strong basic indicators, Life Time is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

DANBNK 6466 09

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DANBNK 6466 09 JAN 26 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, DANBNK is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Life Time and DANBNK

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

The idea behind Life Time Group and DANBNK 6466 09 JAN 26 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.