Correlation Between Fluent and LENSAR
Can any of the company-specific risk be diversified away by investing in both Fluent 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 Fluent and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and LENSAR Inc, you can compare the effects of market volatilities on Fluent 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 Fluent with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and LENSAR.
Diversification Opportunities for Fluent and LENSAR
Pay attention - limited upside
The 3 months correlation between Fluent and LENSAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Fluent 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 Fluent Inc 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 Fluent i.e., Fluent and LENSAR go up and down completely randomly.
Pair Corralation between Fluent and LENSAR
Given the investment horizon of 90 days Fluent is expected to generate 6.23 times less return on investment than LENSAR. But when comparing it to its historical volatility, Fluent Inc is 1.05 times less risky than LENSAR. It trades about 0.02 of its potential returns per unit of risk. LENSAR Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 256.00 in LENSAR Inc on August 27, 2024 and sell it today you would earn a total of 482.00 from holding LENSAR Inc or generate 188.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluent Inc vs. LENSAR Inc
Performance |
| Timeline |
| Fluent Inc |
| LENSAR Inc |
Fluent and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and LENSAR
The main advantage of trading using opposite Fluent and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent 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.| Fluent vs. Mirriad Advertising plc | Fluent vs. INEO Tech Corp | Fluent vs. Innovid Corp | Fluent vs. Townsquare Media |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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