Correlation Between Nemaura Medical and LENSAR

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

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

Diversification Opportunities for Nemaura Medical and LENSAR

0.38

Correlation Coefficient

Nemaura Medical  LENSAR

Weak diversification

The 3 months correlation between Nemaura and LENSAR is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nemaura Medical and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Nemaura Medical 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 Nemaura Medical 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 Nemaura Medical i.e., Nemaura Medical and LENSAR go up and down completely randomly.

Pair Corralation between Nemaura Medical and LENSAR

If you would invest  738.00  in LENSAR Inc on September 23, 2024 and sell it today you would earn a total of  32.00  from holding LENSAR Inc or generate 4.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Nemaura Medical  vs.  LENSAR Inc

Nemaura Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nemaura Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nemaura Medical is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Nemaura Medical and LENSAR

The main advantage of trading using opposite Nemaura Medical and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nemaura Medical 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 Nemaura Medical 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.