Correlation Between LENSAR and Bioventus
Can any of the company-specific risk be diversified away by investing in both LENSAR and Bioventus 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 Bioventus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Bioventus, you can compare the effects of market volatilities on LENSAR and Bioventus 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 Bioventus. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Bioventus.
Diversification Opportunities for LENSAR and Bioventus
Modest diversification
The 3 months correlation between LENSAR and Bioventus is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Bioventus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioventus 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 Bioventus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioventus has no effect on the direction of LENSAR i.e., LENSAR and Bioventus go up and down completely randomly.
Pair Corralation between LENSAR and Bioventus
Given the investment horizon of 90 days LENSAR Inc is expected to generate 1.22 times more return on investment than Bioventus. However, LENSAR is 1.22 times more volatile than Bioventus. It trades about 0.12 of its potential returns per unit of risk. Bioventus is currently generating about 0.1 per unit of risk. If you would invest 228.00 in LENSAR Inc on September 2, 2024 and sell it today you would earn a total of 525.00 from holding LENSAR Inc or generate 230.26% 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. Bioventus
Performance |
| Timeline |
| LENSAR Inc |
| Bioventus |
LENSAR and Bioventus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Bioventus
The main advantage of trading using opposite LENSAR and Bioventus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Bioventus 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 Bioventus will offset losses from the drop in Bioventus' long position.| LENSAR vs. Profound Medical Corp | LENSAR vs. Si Bone | LENSAR vs. Nevro Corp | LENSAR vs. Orthopediatrics Corp |
| Bioventus vs. Tivic Health Systems | Bioventus vs. Bluejay Diagnostics | Bioventus vs. Heart Test Laboratories | Bioventus vs. Nuwellis |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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