Correlation Between Dynatronics and LENSAR

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

By analyzing existing cross correlation between Dynatronics and LENSAR Inc, you can compare the effects of market volatilities on Dynatronics and LENSAR 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 Dynatronics with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynatronics and LENSAR.

Diversification Opportunities for Dynatronics and LENSAR

-0.73

Correlation Coefficient

Dynatronics  LENSAR

Pay attention - limited upside

The 3 months correlation between Dynatronics and LENSAR is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dynatronics and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Dynatronics 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 Dynatronics are associated (or correlated) with LENSAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENSAR Inc has no effect on the direction of Dynatronics i.e., Dynatronics and LENSAR go up and down completely randomly.

Pair Corralation between Dynatronics and LENSAR

Given the investment horizon of 90 days Dynatronics is expected to under-perform the LENSAR. In addition to that, Dynatronics is 1.33 times more volatile than LENSAR Inc. It trades about -0.07 of its total potential returns per unit of risk. LENSAR Inc is currently generating about 0.11 per unit of volatility. If you would invest  248.00  in LENSAR Inc on September 23, 2024 and sell it today you would earn a total of  522.00  from holding LENSAR Inc or generate 210.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	57.41%
Values	Daily Returns

Dynatronics  vs.  LENSAR Inc

Dynatronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dynatronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dynatronics is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

LENSAR Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, LENSAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dynatronics and LENSAR

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

The idea behind Dynatronics and LENSAR Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .