Correlation Between Life Time and HUHUTECH International

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

Diversification Opportunities for Life Time and HUHUTECH International

-0.75

Correlation Coefficient

Life Time  HUHUTECH International

Pay attention - limited upside

The 3 months correlation between Life and HUHUTECH is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and HUHUTECH International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUHUTECH 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 HUHUTECH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUHUTECH International has no effect on the direction of Life Time i.e., Life Time and HUHUTECH International go up and down completely randomly.

Pair Corralation between Life Time and HUHUTECH International

Considering the 90-day investment horizon Life Time Group is expected to generate 0.38 times more return on investment than HUHUTECH International. However, Life Time Group is 2.66 times less risky than HUHUTECH International. It trades about 0.26 of its potential returns per unit of risk. HUHUTECH International Group is currently generating about 0.04 per unit of risk. If you would invest  2,231  in Life Time Group on December 20, 2024 and sell it today you would earn a total of  865.00  from holding Life Time Group or generate 38.77% return on investment over 90 days.

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

Life Time Group  vs.  HUHUTECH International Group

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 20 (%) 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.

HUHUTECH International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUHUTECH International Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, HUHUTECH International unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Life Time and HUHUTECH International

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

The idea behind Life Time Group and HUHUTECH International 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.