Correlation Between LENSAR and Corporacion America
Can any of the company-specific risk be diversified away by investing in both LENSAR and Corporacion America 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 Corporacion America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Corporacion America Airports, you can compare the effects of market volatilities on LENSAR and Corporacion America 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 Corporacion America. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Corporacion America.
Diversification Opportunities for LENSAR and Corporacion America
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LENSAR and Corporacion is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America 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 Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of LENSAR i.e., LENSAR and Corporacion America go up and down completely randomly.
Pair Corralation between LENSAR and Corporacion America
Given the investment horizon of 90 days LENSAR Inc is expected to generate 1.93 times more return on investment than Corporacion America. However, LENSAR is 1.93 times more volatile than Corporacion America Airports. It trades about 0.33 of its potential returns per unit of risk. Corporacion America Airports is currently generating about -0.02 per unit of risk. If you would invest 553.00 in LENSAR Inc on August 31, 2024 and sell it today you would earn a total of 216.00 from holding LENSAR Inc or generate 39.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LENSAR Inc vs. Corporacion America Airports
Performance |
| Timeline |
| LENSAR Inc |
| Corporacion America |
LENSAR and Corporacion America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Corporacion America
The main advantage of trading using opposite LENSAR and Corporacion America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Corporacion America 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 Corporacion America will offset losses from the drop in Corporacion America's long position.| LENSAR vs. Abbott Laboratories | LENSAR vs. Medtronic PLC | LENSAR vs. Edwards Lifesciences Corp | LENSAR vs. ZimVie Inc |
| Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. AerSale Corp | Corporacion America vs. Grupo Aeroportuario del |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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