Correlation Between LENSAR and 00206RFW7

Can any of the company-specific risk be diversified away by investing in both LENSAR and 00206RFW7 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 00206RFW7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LENSAR Inc and ATT INC 49, you can compare the effects of market volatilities on LENSAR and 00206RFW7 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 00206RFW7. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and 00206RFW7.

Diversification Opportunities for LENSAR and 00206RFW7

-0.64

Correlation Coefficient

LENSAR  00206RFW7

Excellent diversification

The 3 months correlation between LENSAR and 00206RFW7 is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and ATT INC 49 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT INC 49 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 00206RFW7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT INC 49 has no effect on the direction of LENSAR i.e., LENSAR and 00206RFW7 go up and down completely randomly.

Pair Corralation between LENSAR and 00206RFW7

Given the investment horizon of 90 days LENSAR Inc is expected to generate 4.75 times more return on investment than 00206RFW7. However, LENSAR is 4.75 times more volatile than ATT INC 49. It trades about 0.19 of its potential returns per unit of risk. ATT INC 49 is currently generating about -0.02 per unit of risk. If you would invest  443.00  in LENSAR Inc on September 4, 2024 and sell it today you would earn a total of  312.00  from holding LENSAR Inc or generate 70.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

LENSAR Inc  vs.  ATT INC 49

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.

ATT INC 49

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATT INC 49 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 00206RFW7 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LENSAR and 00206RFW7

The main advantage of trading using opposite LENSAR and 00206RFW7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, 00206RFW7 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 00206RFW7 will offset losses from the drop in 00206RFW7's long position.

The idea behind LENSAR Inc and ATT INC 49 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.