Correlation Between LENSAR and BCE
Can any of the company-specific risk be diversified away by investing in both LENSAR and BCE 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 BCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and BCE Inc, you can compare the effects of market volatilities on LENSAR and BCE 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 BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and BCE.
Diversification Opportunities for LENSAR and BCE
Pay attention - limited upside
The 3 months correlation between LENSAR and BCE is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE 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 BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of LENSAR i.e., LENSAR and BCE go up and down completely randomly.
Pair Corralation between LENSAR and BCE
Given the investment horizon of 90 days LENSAR Inc is expected to generate 3.02 times more return on investment than BCE. However, LENSAR is 3.02 times more volatile than BCE Inc. It trades about 0.28 of its potential returns per unit of risk. BCE Inc is currently generating about -0.3 per unit of risk. If you would invest 442.00 in LENSAR Inc on September 5, 2024 and sell it today you would earn a total of 322.00 from holding LENSAR Inc or generate 72.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LENSAR Inc vs. BCE Inc
Performance |
| Timeline |
| LENSAR Inc |
| BCE Inc |
LENSAR and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and BCE
The main advantage of trading using opposite LENSAR and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.The idea behind LENSAR Inc and BCE 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |