Correlation Between Life Time and Funko

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

Diversification Opportunities for Life Time and Funko

-0.25

Correlation Coefficient

Life Time  Funko

Very good diversification

The 3 months correlation between Life and Funko is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc 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 Funko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Funko Inc has no effect on the direction of Life Time i.e., Life Time and Funko go up and down completely randomly.

Pair Corralation between Life Time and Funko

Considering the 90-day investment horizon Life Time Group is expected to generate 0.68 times more return on investment than Funko. However, Life Time Group is 1.46 times less risky than Funko. It trades about 0.27 of its potential returns per unit of risk. Funko Inc is currently generating about -0.29 per unit of risk. If you would invest  2,192  in Life Time Group on December 27, 2024 and sell it today you would earn a total of  982.00  from holding Life Time Group or generate 44.8% 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.  Funko Inc

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 21 (%) 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.

Funko Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Funko Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward-looking signals remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Life Time and Funko

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

The idea behind Life Time Group and Funko Inc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.