Correlation Between LENSAR and Beyond Air
Can any of the company-specific risk be diversified away by investing in both LENSAR and Beyond 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 Beyond 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 Beyond Air, you can compare the effects of market volatilities on LENSAR and Beyond 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 Beyond Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Beyond Air.
Diversification Opportunities for LENSAR and Beyond Air
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LENSAR and Beyond is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Beyond Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond 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 Beyond Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Air has no effect on the direction of LENSAR i.e., LENSAR and Beyond Air go up and down completely randomly.
Pair Corralation between LENSAR and Beyond Air
Given the investment horizon of 90 days LENSAR Inc is expected to generate 0.82 times more return on investment than Beyond Air. However, LENSAR Inc is 1.21 times less risky than Beyond Air. It trades about 0.27 of its potential returns per unit of risk. Beyond Air is currently generating about 0.07 per unit of risk. If you would invest 869.00 in LENSAR Inc on November 3, 2024 and sell it today you would earn a total of 241.00 from holding LENSAR Inc or generate 27.73% 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. Beyond Air
Performance |
| Timeline |
| LENSAR Inc |
| Beyond Air |
LENSAR and Beyond Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Beyond Air
The main advantage of trading using opposite LENSAR and Beyond Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Beyond 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 Beyond Air will offset losses from the drop in Beyond Air's long position.The idea behind LENSAR Inc and Beyond 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.| Beyond Air vs. Lucid Diagnostics | Beyond Air vs. Inari Medical | Beyond Air vs. PAVmed Series Z | Beyond Air vs. Clearpoint Neuro |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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