Correlation Between Life Time and Mayfair Gold

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

Diversification Opportunities for Life Time and Mayfair Gold

-0.28

Correlation Coefficient

Life Time  Mayfair Gold

Very good diversification

The 3 months correlation between Life and Mayfair is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Life Time Group and Mayfair Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mayfair Gold Corp 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 Mayfair Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mayfair Gold Corp has no effect on the direction of Life Time i.e., Life Time and Mayfair Gold go up and down completely randomly.

Pair Corralation between Life Time and Mayfair Gold

Considering the 90-day investment horizon Life Time Group is expected to under-perform the Mayfair Gold. But the stock apears to be less risky and, when comparing its historical volatility, Life Time Group is 1.2 times less risky than Mayfair Gold. The stock trades about -0.05 of its potential returns per unit of risk. The Mayfair Gold Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  131.00  in Mayfair Gold Corp on September 17, 2024 and sell it today you would lose (3.00) from holding Mayfair Gold Corp or give up 2.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Life Time Group  vs.  Mayfair Gold Corp

Life Time Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Life Time Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Life Time is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Mayfair Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mayfair Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Mayfair Gold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Life Time and Mayfair Gold

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

The idea behind Life Time Group and Mayfair Gold Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.