Correlation Between Lifestyle Global and Airmate Cayman

Can any of the company-specific risk be diversified away by investing in both Lifestyle Global and Airmate Cayman 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 Lifestyle Global and Airmate Cayman into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lifestyle Global Enterprise and Airmate Cayman International, you can compare the effects of market volatilities on Lifestyle Global and Airmate Cayman 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 Lifestyle Global with a short position of Airmate Cayman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestyle Global and Airmate Cayman.

Diversification Opportunities for Lifestyle Global and Airmate Cayman

0.76

Correlation Coefficient

Lifestyle Global  Airmate Cayman

Poor diversification

The 3 months correlation between Lifestyle and Airmate is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lifestyle Global Enterprise and Airmate Cayman International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airmate Cayman Inter and Lifestyle Global 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 Lifestyle Global Enterprise are associated (or correlated) with Airmate Cayman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airmate Cayman Inter has no effect on the direction of Lifestyle Global i.e., Lifestyle Global and Airmate Cayman go up and down completely randomly.

Pair Corralation between Lifestyle Global and Airmate Cayman

Assuming the 90 days trading horizon Lifestyle Global Enterprise is expected to under-perform the Airmate Cayman. But the stock apears to be less risky and, when comparing its historical volatility, Lifestyle Global Enterprise is 1.28 times less risky than Airmate Cayman. The stock trades about -0.39 of its potential returns per unit of risk. The Airmate Cayman International is currently generating about -0.27 of returns per unit of risk over similar time horizon. If you would invest  1,440  in Airmate Cayman International on October 11, 2024 and sell it today you would lose (80.00) from holding Airmate Cayman International or give up 5.56% of portfolio value over 90 days.

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

Lifestyle Global Enterprise  vs.  Airmate Cayman International

Lifestyle Global Ent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lifestyle Global Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Airmate Cayman Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Airmate Cayman International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Lifestyle Global and Airmate Cayman

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

The idea behind Lifestyle Global Enterprise and Airmate Cayman International 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.