Correlation Between Elevance Health and LENSAR
Can any of the company-specific risk be diversified away by investing in both Elevance Health 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 Elevance Health and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elevance Health and LENSAR Inc, you can compare the effects of market volatilities on Elevance Health 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 Elevance Health with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevance Health and LENSAR.
Diversification Opportunities for Elevance Health and LENSAR
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elevance and LENSAR is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Elevance Health 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 Elevance Health 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 Elevance Health i.e., Elevance Health and LENSAR go up and down completely randomly.
Pair Corralation between Elevance Health and LENSAR
Considering the 90-day investment horizon Elevance Health is expected to under-perform the LENSAR. But the stock apears to be less risky and, when comparing its historical volatility, Elevance Health is 3.62 times less risky than LENSAR. The stock trades about -0.11 of its potential returns per unit of risk. The LENSAR Inc is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 560.00 in LENSAR Inc on August 29, 2024 and sell it today you would earn a total of 209.00 from holding LENSAR Inc or generate 37.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elevance Health vs. LENSAR Inc
Performance |
| Timeline |
| Elevance Health |
| LENSAR Inc |
Elevance Health and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elevance Health and LENSAR
The main advantage of trading using opposite Elevance Health and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health 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.| Elevance Health vs. Cigna Corp | Elevance Health vs. UnitedHealth Group Incorporated | Elevance Health vs. Centene Corp | Elevance Health vs. Molina Healthcare |
| LENSAR vs. Edwards Lifesciences Corp | LENSAR vs. Outset Medical | LENSAR vs. Venus Concept | LENSAR vs. DexCom Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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