Correlation Between FG Group and Life Time

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

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

Diversification Opportunities for FG Group and Life Time

-0.29

Correlation Coefficient

FG Group  Life Time

Very good diversification

The 3 months correlation between FGH and Life is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding FG Group Holdings 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 FG Group 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 FG Group Holdings 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 FG Group i.e., FG Group and Life Time go up and down completely randomly.

Pair Corralation between FG Group and Life Time

If you would invest  2,218  in Life Time Group on October 25, 2024 and sell it today you would earn a total of  627.00  from holding Life Time Group or generate 28.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

FG Group Holdings  vs.  Life Time Group

FG Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FG Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, FG Group is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Life Time Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Life Time Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Life Time demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FG Group and Life Time

The main advantage of trading using opposite FG Group and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FG Group 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 FG Group Holdings 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.