Correlation Between Life Time and SUPER HI

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

Diversification Opportunities for Life Time and SUPER HI

-0.3

Correlation Coefficient

Life Time  SUPER HI

Very good diversification

The 3 months correlation between Life and SUPER is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL 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 SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of Life Time i.e., Life Time and SUPER HI go up and down completely randomly.

Pair Corralation between Life Time and SUPER HI

Considering the 90-day investment horizon Life Time is expected to generate 1.11 times less return on investment than SUPER HI. But when comparing it to its historical volatility, Life Time Group is 1.46 times less risky than SUPER HI. It trades about 0.04 of its potential returns per unit of risk. SUPER HI INTERNATIONAL is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,229  in SUPER HI INTERNATIONAL on October 26, 2024 and sell it today you would earn a total of  220.99  from holding SUPER HI INTERNATIONAL or generate 9.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	34.82%
Values	Daily Returns

Life Time Group  vs.  SUPER HI INTERNATIONAL

Life Time Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Life Time Group are ranked lower than 15 (%) 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.

SUPER HI INTERNATIONAL

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SUPER HI INTERNATIONAL are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, SUPER HI disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Life Time and SUPER HI

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

The idea behind Life Time Group and SUPER HI 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.