Correlation Between AKITA Drilling and LENSAR
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling 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 AKITA Drilling and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and LENSAR Inc, you can compare the effects of market volatilities on AKITA Drilling 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 AKITA Drilling with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and LENSAR.
Diversification Opportunities for AKITA Drilling and LENSAR
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AKITA and LENSAR is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and AKITA Drilling 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 AKITA Drilling 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 AKITA Drilling i.e., AKITA Drilling and LENSAR go up and down completely randomly.
Pair Corralation between AKITA Drilling and LENSAR
Assuming the 90 days horizon AKITA Drilling is expected to generate 3.91 times less return on investment than LENSAR. But when comparing it to its historical volatility, AKITA Drilling is 1.85 times less risky than LENSAR. It trades about 0.04 of its potential returns per unit of risk. LENSAR Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 739.00 in LENSAR Inc on September 14, 2024 and sell it today you would earn a total of 25.00 from holding LENSAR Inc or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
AKITA Drilling vs. LENSAR Inc
Performance |
| Timeline |
| AKITA Drilling |
| LENSAR Inc |
AKITA Drilling and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and LENSAR
The main advantage of trading using opposite AKITA Drilling and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling 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.| AKITA Drilling vs. Cathedral Energy Services | AKITA Drilling vs. Vantage Drilling International | AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc |
| LENSAR vs. Avita Medical | LENSAR vs. Sight Sciences | LENSAR vs. Treace Medical Concepts | LENSAR vs. Neuropace |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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