Correlation Between LENSAR and Armm
Can any of the company-specific risk be diversified away by investing in both LENSAR and Armm 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 Armm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Armm Inc, you can compare the effects of market volatilities on LENSAR and Armm 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 Armm. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Armm.
Diversification Opportunities for LENSAR and Armm
Pay attention - limited upside
The 3 months correlation between LENSAR and Armm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Armm Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armm Inc 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 Armm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armm Inc has no effect on the direction of LENSAR i.e., LENSAR and Armm go up and down completely randomly.
Pair Corralation between LENSAR and Armm
If you would invest 560.00 in LENSAR Inc on August 28, 2024 and sell it today you would earn a total of 176.00 from holding LENSAR Inc or generate 31.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LENSAR Inc vs. Armm Inc
Performance |
| Timeline |
| LENSAR Inc |
| Armm Inc |
LENSAR and Armm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Armm
The main advantage of trading using opposite LENSAR and Armm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Armm 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 Armm will offset losses from the drop in Armm's long position.The idea behind LENSAR Inc and Armm Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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