Correlation Between LENSAR and PAVmed
Can any of the company-specific risk be diversified away by investing in both LENSAR and PAVmed 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 PAVmed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and PAVmed Inc, you can compare the effects of market volatilities on LENSAR and PAVmed 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 PAVmed. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and PAVmed.
Diversification Opportunities for LENSAR and PAVmed
Excellent diversification
The 3 months correlation between LENSAR and PAVmed is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and PAVmed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAVmed 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 PAVmed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAVmed Inc has no effect on the direction of LENSAR i.e., LENSAR and PAVmed go up and down completely randomly.
Pair Corralation between LENSAR and PAVmed
Given the investment horizon of 90 days LENSAR Inc is expected to generate 0.65 times more return on investment than PAVmed. However, LENSAR Inc is 1.54 times less risky than PAVmed. It trades about 0.05 of its potential returns per unit of risk. PAVmed Inc is currently generating about -0.03 per unit of risk. If you would invest 434.00 in LENSAR Inc on September 2, 2024 and sell it today you would earn a total of 319.00 from holding LENSAR Inc or generate 73.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LENSAR Inc vs. PAVmed Inc
Performance |
| Timeline |
| LENSAR Inc |
| PAVmed Inc |
LENSAR and PAVmed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and PAVmed
The main advantage of trading using opposite LENSAR and PAVmed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, PAVmed 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 PAVmed will offset losses from the drop in PAVmed's long position.| LENSAR vs. Profound Medical Corp | LENSAR vs. Si Bone | LENSAR vs. Nevro Corp | LENSAR vs. Orthopediatrics Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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