Correlation Between LENSAR and WT Offshore
Can any of the company-specific risk be diversified away by investing in both LENSAR and WT Offshore 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 WT Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and WT Offshore, you can compare the effects of market volatilities on LENSAR and WT Offshore 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 WT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and WT Offshore.
Diversification Opportunities for LENSAR and WT Offshore
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LENSAR and WTI is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and WT Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Offshore 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 WT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Offshore has no effect on the direction of LENSAR i.e., LENSAR and WT Offshore go up and down completely randomly.
Pair Corralation between LENSAR and WT Offshore
Given the investment horizon of 90 days LENSAR Inc is expected to generate 1.66 times more return on investment than WT Offshore. However, LENSAR is 1.66 times more volatile than WT Offshore. It trades about 0.12 of its potential returns per unit of risk. WT Offshore is currently generating about -0.04 per unit of risk. If you would invest 226.00 in LENSAR Inc on September 4, 2024 and sell it today you would earn a total of 544.00 from holding LENSAR Inc or generate 240.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LENSAR Inc vs. WT Offshore
Performance |
| Timeline |
| LENSAR Inc |
| WT Offshore |
LENSAR and WT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and WT Offshore
The main advantage of trading using opposite LENSAR and WT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, WT Offshore 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 WT Offshore will offset losses from the drop in WT Offshore's long position.The idea behind LENSAR Inc and WT Offshore 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.| WT Offshore vs. Evolution Petroleum | WT Offshore vs. Ring Energy | WT Offshore vs. Gran Tierra Energy | WT Offshore vs. PEDEVCO 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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