Correlation Between LENSAR and Albertsons Companies
Can any of the company-specific risk be diversified away by investing in both LENSAR and Albertsons Companies 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 LENSAR and Albertsons Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Albertsons Companies, you can compare the effects of market volatilities on LENSAR and Albertsons Companies 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 LENSAR with a short position of Albertsons Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Albertsons Companies.
Diversification Opportunities for LENSAR and Albertsons Companies
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LENSAR and Albertsons is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Albertsons Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albertsons Companies and LENSAR 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 LENSAR Inc are associated (or correlated) with Albertsons Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albertsons Companies has no effect on the direction of LENSAR i.e., LENSAR and Albertsons Companies go up and down completely randomly.
Pair Corralation between LENSAR and Albertsons Companies
Given the investment horizon of 90 days LENSAR Inc is expected to generate 5.23 times more return on investment than Albertsons Companies. However, LENSAR is 5.23 times more volatile than Albertsons Companies. It trades about 0.06 of its potential returns per unit of risk. Albertsons Companies is currently generating about -0.01 per unit of risk. If you would invest 322.00 in LENSAR Inc on August 29, 2024 and sell it today you would earn a total of 447.00 from holding LENSAR Inc or generate 138.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LENSAR Inc vs. Albertsons Companies
Performance |
| Timeline |
| LENSAR Inc |
| Albertsons Companies |
LENSAR and Albertsons Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Albertsons Companies
The main advantage of trading using opposite LENSAR and Albertsons Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Albertsons Companies 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 Albertsons Companies will offset losses from the drop in Albertsons Companies' long position.| LENSAR vs. Edwards Lifesciences Corp | LENSAR vs. Outset Medical | LENSAR vs. Venus Concept | LENSAR vs. DexCom Inc |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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