Correlation Between Life Time and Comstock Holding

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

Diversification Opportunities for Life Time and Comstock Holding

-0.34

Correlation Coefficient

Life Time  Comstock Holding

Very good diversification

The 3 months correlation between Life and Comstock is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Comstock Holding Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Holding Com 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 Comstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Holding Com has no effect on the direction of Life Time i.e., Life Time and Comstock Holding go up and down completely randomly.

Pair Corralation between Life Time and Comstock Holding

Considering the 90-day investment horizon Life Time Group is expected to generate 0.71 times more return on investment than Comstock Holding. However, Life Time Group is 1.41 times less risky than Comstock Holding. It trades about 0.22 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about -0.1 per unit of risk. If you would invest  2,396  in Life Time Group on December 1, 2024 and sell it today you would earn a total of  650.00  from holding Life Time Group or generate 27.13% return on investment over 90 days.

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

Life Time Group  vs.  Comstock Holding Companies

Life Time Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Life Time Group are ranked lower than 17 (%) 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.

Comstock Holding Com

Risk-Adjusted Performance

Very Weak

Over the last 90 days Comstock Holding Companies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Life Time and Comstock Holding

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

The idea behind Life Time Group and Comstock Holding Companies 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.