Correlation Between MSP Recovery and LENSAR
Can any of the company-specific risk be diversified away by investing in both MSP Recovery 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 MSP Recovery and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSP Recovery and LENSAR Inc, you can compare the effects of market volatilities on MSP Recovery 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 MSP Recovery with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSP Recovery and LENSAR.
Diversification Opportunities for MSP Recovery and LENSAR
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MSP and LENSAR is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding MSP Recovery and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and MSP Recovery 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 MSP Recovery 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 MSP Recovery i.e., MSP Recovery and LENSAR go up and down completely randomly.
Pair Corralation between MSP Recovery and LENSAR
Assuming the 90 days horizon MSP Recovery is expected to generate 13.0 times more return on investment than LENSAR. However, MSP Recovery is 13.0 times more volatile than LENSAR Inc. It trades about 0.1 of its potential returns per unit of risk. LENSAR Inc is currently generating about 0.08 per unit of risk. If you would invest 10.00 in MSP Recovery on September 14, 2024 and sell it today you would lose (3.13) from holding MSP Recovery or give up 31.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
MSP Recovery vs. LENSAR Inc
Performance |
| Timeline |
| MSP Recovery |
| LENSAR Inc |
MSP Recovery and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSP Recovery and LENSAR
The main advantage of trading using opposite MSP Recovery and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSP Recovery 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.| MSP Recovery vs. Agnico Eagle Mines | MSP Recovery vs. RadNet Inc | MSP Recovery vs. Teleflex Incorporated | MSP Recovery vs. Aerofoam Metals |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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