Correlation Between NBCUNIVERSAL and Life Time

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

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

Diversification Opportunities for NBCUNIVERSAL and Life Time

-0.08

Correlation Coefficient

NBCUNIVERSAL  Life Time

Good diversification

The 3 months correlation between NBCUNIVERSAL and Life is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL 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 NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL i.e., NBCUNIVERSAL and Life Time go up and down completely randomly.

Pair Corralation between NBCUNIVERSAL and Life Time

Assuming the 90 days trading horizon NBCUNIVERSAL is expected to generate 2.37 times less return on investment than Life Time. But when comparing it to its historical volatility, NBCUNIVERSAL MEDIA LLC is 1.48 times less risky than Life Time. It trades about 0.04 of its potential returns per unit of risk. Life Time Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,897  in Life Time Group on September 25, 2024 and sell it today you would earn a total of  305.00  from holding Life Time Group or generate 16.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	48.41%
Values	Daily Returns

NBCUNIVERSAL MEDIA LLC  vs.  Life Time Group

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NBCUNIVERSAL MEDIA LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NBCUNIVERSAL is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 latest abnormal performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with NBCUNIVERSAL and Life Time

The main advantage of trading using opposite NBCUNIVERSAL and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBCUNIVERSAL 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 NBCUNIVERSAL MEDIA LLC 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 Stocks Directory module to find actively traded stocks across global markets.