Correlation Between Mayfair Gold and Life Time

Can any of the company-specific risk be diversified away by investing in both Mayfair Gold and Life Time 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 Mayfair Gold and Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mayfair Gold Corp and Life Time Group, you can compare the effects of market volatilities on Mayfair Gold and Life Time 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 Mayfair Gold with a short position of Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayfair Gold and Life Time.

Diversification Opportunities for Mayfair Gold and Life Time

0.34

Correlation Coefficient

Mayfair Gold  Life Time

Weak diversification

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

Pair Corralation between Mayfair Gold and Life Time

Assuming the 90 days horizon Mayfair Gold is expected to generate 9.46 times less return on investment than Life Time. In addition to that, Mayfair Gold is 1.46 times more volatile than Life Time Group. It trades about 0.02 of its total potential returns per unit of risk. Life Time Group is currently generating about 0.28 per unit of volatility. If you would invest  2,220  in Life Time Group on December 25, 2024 and sell it today you would earn a total of  1,028  from holding Life Time Group or generate 46.31% return on investment over 90 days.

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

Mayfair Gold Corp  vs.  Life Time Group

Mayfair Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mayfair Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

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 22 (%) 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.

Pair Trading with Mayfair Gold and Life Time

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

The idea behind Mayfair Gold Corp and Life Time 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.