Correlation Between LivaNova PLC and LENSAR
Can any of the company-specific risk be diversified away by investing in both LivaNova PLC 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 LivaNova PLC and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LivaNova PLC and LENSAR Inc, you can compare the effects of market volatilities on LivaNova PLC 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 LivaNova PLC with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of LivaNova PLC and LENSAR.
Diversification Opportunities for LivaNova PLC and LENSAR
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LivaNova and LENSAR is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding LivaNova PLC and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and LivaNova PLC 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 LivaNova PLC 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 LivaNova PLC i.e., LivaNova PLC and LENSAR go up and down completely randomly.
Pair Corralation between LivaNova PLC and LENSAR
Given the investment horizon of 90 days LivaNova PLC is expected to under-perform the LENSAR. But the stock apears to be less risky and, when comparing its historical volatility, LivaNova PLC is 2.41 times less risky than LENSAR. The stock trades about -0.07 of its potential returns per unit of risk. The LENSAR Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 560.00 in LENSAR Inc on August 27, 2024 and sell it today you would earn a total of 178.00 from holding LENSAR Inc or generate 31.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LivaNova PLC vs. LENSAR Inc
Performance |
| Timeline |
| LivaNova PLC |
| LENSAR Inc |
LivaNova PLC and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LivaNova PLC and LENSAR
The main advantage of trading using opposite LivaNova PLC and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LivaNova PLC 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.| LivaNova PLC vs. Heartbeam | LivaNova PLC vs. EUDA Health Holdings | LivaNova PLC vs. Nutex Health | LivaNova PLC vs. Healthcare Triangle |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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