Correlation Between LENSAR and Sealed Air
Can any of the company-specific risk be diversified away by investing in both LENSAR and Sealed Air 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 Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Sealed Air, you can compare the effects of market volatilities on LENSAR and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Sealed Air.
Diversification Opportunities for LENSAR and Sealed Air
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LENSAR and Sealed is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Sealed Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air has no effect on the direction of LENSAR i.e., LENSAR and Sealed Air go up and down completely randomly.
Pair Corralation between LENSAR and Sealed Air
Given the investment horizon of 90 days LENSAR Inc is expected to generate 2.4 times more return on investment than Sealed Air. However, LENSAR is 2.4 times more volatile than Sealed Air. It trades about 0.06 of its potential returns per unit of risk. Sealed Air is currently generating about -0.03 per unit of risk. If you would invest 317.00 in LENSAR Inc on August 24, 2024 and sell it today you would earn a total of 421.00 from holding LENSAR Inc or generate 132.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LENSAR Inc vs. Sealed Air
Performance |
| Timeline |
| LENSAR Inc |
| Sealed Air |
LENSAR and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Sealed Air
The main advantage of trading using opposite LENSAR and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.The idea behind LENSAR Inc and Sealed Air 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.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |