Correlation Between McCormick Company and Life Time

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

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

Diversification Opportunities for McCormick Company and Life Time

0.28

Correlation Coefficient

McCormick Company  Life Time

Modest diversification

The 3 months correlation between McCormick and Life is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding McCormick Company Incorporated 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 McCormick Company 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 McCormick Company Incorporated 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 McCormick Company i.e., McCormick Company and Life Time go up and down completely randomly.

Pair Corralation between McCormick Company and Life Time

Considering the 90-day investment horizon McCormick Company Incorporated is expected to generate 0.6 times more return on investment than Life Time. However, McCormick Company Incorporated is 1.68 times less risky than Life Time. It trades about -0.06 of its potential returns per unit of risk. Life Time Group is currently generating about -0.09 per unit of risk. If you would invest  7,428  in McCormick Company Incorporated on May 6, 2025 and sell it today you would lose (400.00) from holding McCormick Company Incorporated or give up 5.39% of portfolio value over 90 days.

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

McCormick Company Incorporated  vs.  Life Time Group

McCormick Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days McCormick Company Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, McCormick Company is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Life Time Group

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with McCormick Company and Life Time

The main advantage of trading using opposite McCormick Company and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McCormick Company 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 McCormick Company Incorporated 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.