Correlation Between LENSAR and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both LENSAR and Canlan Ice 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 Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Canlan Ice Sports, you can compare the effects of market volatilities on LENSAR and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Canlan Ice.
Diversification Opportunities for LENSAR and Canlan Ice
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LENSAR and Canlan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of LENSAR i.e., LENSAR and Canlan Ice go up and down completely randomly.
Pair Corralation between LENSAR and Canlan Ice
Given the investment horizon of 90 days LENSAR Inc is expected to generate 38.23 times more return on investment than Canlan Ice. However, LENSAR is 38.23 times more volatile than Canlan Ice Sports. It trades about 0.11 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.15 per unit of risk. If you would invest 464.00 in LENSAR Inc on August 30, 2024 and sell it today you would earn a total of 305.00 from holding LENSAR Inc or generate 65.73% 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. Canlan Ice Sports
Performance |
| Timeline |
| LENSAR Inc |
| Canlan Ice Sports |
LENSAR and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Canlan Ice
The main advantage of trading using opposite LENSAR and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| LENSAR vs. ReShape Lifesciences | LENSAR vs. Bone Biologics Corp | LENSAR vs. Tivic Health Systems | LENSAR 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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