Correlation Between LENSAR and Fluent
Can any of the company-specific risk be diversified away by investing in both LENSAR and Fluent 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 Fluent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Fluent Inc, you can compare the effects of market volatilities on LENSAR and Fluent 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 Fluent. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Fluent.
Diversification Opportunities for LENSAR and Fluent
Average diversification
The 3 months correlation between LENSAR and Fluent is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Fluent Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluent 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 Fluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluent Inc has no effect on the direction of LENSAR i.e., LENSAR and Fluent go up and down completely randomly.
Pair Corralation between LENSAR and Fluent
Given the investment horizon of 90 days LENSAR Inc is expected to generate 2.69 times more return on investment than Fluent. However, LENSAR is 2.69 times more volatile than Fluent Inc. It trades about 0.25 of its potential returns per unit of risk. Fluent Inc is currently generating about 0.01 per unit of risk. If you would invest 832.00 in LENSAR Inc on November 18, 2024 and sell it today you would earn a total of 218.00 from holding LENSAR Inc or generate 26.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LENSAR Inc vs. Fluent Inc
Performance |
| Timeline |
| LENSAR Inc |
| Fluent Inc |
LENSAR and Fluent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Fluent
The main advantage of trading using opposite LENSAR and Fluent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Fluent 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 Fluent will offset losses from the drop in Fluent's long position.The idea behind LENSAR Inc and Fluent 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.| Fluent vs. Marchex | Fluent vs. Dolphin Entertainment | Fluent vs. Beyond Commerce | Fluent vs. MGO Global Common |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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