Correlation Between LENSAR and Zhongchao
Can any of the company-specific risk be diversified away by investing in both LENSAR and Zhongchao 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 Zhongchao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LENSAR Inc and Zhongchao, you can compare the effects of market volatilities on LENSAR and Zhongchao 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 Zhongchao. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and Zhongchao.
Diversification Opportunities for LENSAR and Zhongchao
Very good diversification
The 3 months correlation between LENSAR and Zhongchao is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Zhongchao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongchao 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 Zhongchao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongchao has no effect on the direction of LENSAR i.e., LENSAR and Zhongchao go up and down completely randomly.
Pair Corralation between LENSAR and Zhongchao
Given the investment horizon of 90 days LENSAR Inc is expected to generate 0.56 times more return on investment than Zhongchao. However, LENSAR Inc is 1.8 times less risky than Zhongchao. It trades about 0.11 of its potential returns per unit of risk. Zhongchao is currently generating about -0.04 per unit of risk. If you would invest 219.00 in LENSAR Inc on September 1, 2024 and sell it today you would earn a total of 534.00 from holding LENSAR Inc or generate 243.84% 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. Zhongchao
Performance |
| Timeline |
| LENSAR Inc |
| Zhongchao |
LENSAR and Zhongchao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LENSAR and Zhongchao
The main advantage of trading using opposite LENSAR and Zhongchao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, Zhongchao 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 Zhongchao will offset losses from the drop in Zhongchao's long position.The idea behind LENSAR Inc and Zhongchao 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.| Zhongchao vs. Nano Mobile Healthcare | Zhongchao vs. Healthcare Triangle | Zhongchao vs. Cannabis Sativa | Zhongchao vs. FOXO Technologies |
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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