Correlation Between LENSAR and Treace Medical
Can any of the company-specific risk be diversified away by investing in both LENSAR and Treace Medical 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 Treace Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Treace Medical Concepts, you can compare the effects of market volatilities on LENSAR and Treace Medical 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 Treace Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Treace Medical.
Diversification Opportunities for LENSAR and Treace Medical
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LENSAR and Treace is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Treace Medical Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treace Medical Concepts 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 Treace Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treace Medical Concepts has no effect on the direction of LENSAR i.e., LENSAR and Treace Medical go up and down completely randomly.
Pair Corralation between LENSAR and Treace Medical
Given the investment horizon of 90 days LENSAR is expected to generate 1.07 times less return on investment than Treace Medical. But when comparing it to its historical volatility, LENSAR Inc is 1.09 times less risky than Treace Medical. It trades about 0.31 of its potential returns per unit of risk. Treace Medical Concepts is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 779.00 in Treace Medical Concepts on November 7, 2024 and sell it today you would earn a total of 272.00 from holding Treace Medical Concepts or generate 34.92% 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. Treace Medical Concepts
Performance |
| Timeline |
| LENSAR Inc |
| Treace Medical Concepts |
LENSAR and Treace Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Treace Medical
The main advantage of trading using opposite LENSAR and Treace Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Treace Medical 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 Treace Medical will offset losses from the drop in Treace Medical's long position.| LENSAR vs. Burning Rock Biotech | LENSAR vs. DarioHealth Corp | LENSAR vs. Sera Prognostics | LENSAR vs. Biodesix |
| Treace Medical vs. Rxsight | Treace Medical vs. Axogen Inc | Treace Medical vs. Pulmonx Corp | Treace Medical vs. Orthofix Medical |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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