Correlation Between LENSAR and Permanent TSB
Can any of the company-specific risk be diversified away by investing in both LENSAR and Permanent TSB 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 Permanent TSB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Permanent TSB Group, you can compare the effects of market volatilities on LENSAR and Permanent TSB 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 Permanent TSB. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Permanent TSB.
Diversification Opportunities for LENSAR and Permanent TSB
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LENSAR and Permanent is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Permanent TSB Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permanent TSB Group 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 Permanent TSB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permanent TSB Group has no effect on the direction of LENSAR i.e., LENSAR and Permanent TSB go up and down completely randomly.
Pair Corralation between LENSAR and Permanent TSB
Given the investment horizon of 90 days LENSAR Inc is expected to generate 1.44 times more return on investment than Permanent TSB. However, LENSAR is 1.44 times more volatile than Permanent TSB Group. It trades about 0.06 of its potential returns per unit of risk. Permanent TSB Group is currently generating about -0.01 per unit of risk. If you would invest 295.00 in LENSAR Inc on September 5, 2024 and sell it today you would earn a total of 475.00 from holding LENSAR Inc or generate 161.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 45.45% |
| Values | Daily Returns |
LENSAR Inc vs. Permanent TSB Group
Performance |
| Timeline |
| LENSAR Inc |
| Permanent TSB Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LENSAR and Permanent TSB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Permanent TSB
The main advantage of trading using opposite LENSAR and Permanent TSB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Permanent TSB 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 Permanent TSB will offset losses from the drop in Permanent TSB's long position.The idea behind LENSAR Inc and Permanent TSB Group 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.| Permanent TSB vs. LENSAR Inc | Permanent TSB vs. Ryman Hospitality Properties | Permanent TSB vs. Esperion Therapeutics | Permanent TSB vs. Sonida Senior Living |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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