Correlation Between LENSAR and Inflection Point

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

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

Diversification Opportunities for LENSAR and Inflection Point

0.72

Correlation Coefficient

LENSAR  Inflection Point

Poor diversification

The 3 months correlation between LENSAR and Inflection is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq and LENSAR 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 LENSAR Inc are associated (or correlated) with Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of LENSAR i.e., LENSAR and Inflection Point go up and down completely randomly.

Pair Corralation between LENSAR and Inflection Point

Given the investment horizon of 90 days LENSAR Inc is expected to generate 26.83 times more return on investment than Inflection Point. However, LENSAR is 26.83 times more volatile than Inflection Point Acquisition. It trades about 0.2 of its potential returns per unit of risk. Inflection Point Acquisition is currently generating about 0.2 per unit of risk. If you would invest  446.00  in LENSAR Inc on September 5, 2024 and sell it today you would earn a total of  324.00  from holding LENSAR Inc or generate 72.65% return on investment over 90 days.

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

LENSAR Inc  vs.  Inflection Point Acquisition

LENSAR Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, LENSAR reported solid returns over the last few months and may actually be approaching a breakup point.

Inflection Point Acq

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Inflection Point is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with LENSAR and Inflection Point

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

The idea behind LENSAR Inc and Inflection Point Acquisition 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..