Correlation Between Lifestance Health and Airsculpt Technologies

Can any of the company-specific risk be diversified away by investing in both Lifestance Health and Airsculpt Technologies 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 Lifestance Health and Airsculpt Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Lifestance Health and Airsculpt Technologies

0.57

Correlation Coefficient

Lifestance Health  Airsculpt Technologies

Very weak diversification

The 3 months correlation between Lifestance and Airsculpt is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lifestance Health Group and Airsculpt Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airsculpt Technologies and Lifestance Health 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 Lifestance Health Group are associated (or correlated) with Airsculpt Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airsculpt Technologies has no effect on the direction of Lifestance Health i.e., Lifestance Health and Airsculpt Technologies go up and down completely randomly.

Pair Corralation between Lifestance Health and Airsculpt Technologies

Given the investment horizon of 90 days Lifestance Health Group is expected to generate 0.74 times more return on investment than Airsculpt Technologies. However, Lifestance Health Group is 1.35 times less risky than Airsculpt Technologies. It trades about 0.03 of its potential returns per unit of risk. Airsculpt Technologies is currently generating about 0.02 per unit of risk. If you would invest  663.00  in Lifestance Health Group on September 28, 2024 and sell it today you would earn a total of  81.00  from holding Lifestance Health Group or generate 12.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.63%
Values	Daily Returns

Lifestance Health Group  vs.  Airsculpt Technologies

Lifestance Health

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lifestance Health Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Lifestance Health may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Airsculpt Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Airsculpt Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Airsculpt Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lifestance Health and Airsculpt Technologies

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

The idea behind Lifestance Health Group and Airsculpt Technologies 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.