Correlation Between Natural Alternatives and LENSAR
Can any of the company-specific risk be diversified away by investing in both Natural Alternatives and LENSAR 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 Natural Alternatives and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Alternatives International and LENSAR Inc, you can compare the effects of market volatilities on Natural Alternatives and LENSAR 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 Natural Alternatives with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Alternatives and LENSAR.
Diversification Opportunities for Natural Alternatives and LENSAR
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Natural and LENSAR is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Natural Alternatives Internati and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Natural Alternatives 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 Natural Alternatives International are associated (or correlated) with LENSAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENSAR Inc has no effect on the direction of Natural Alternatives i.e., Natural Alternatives and LENSAR go up and down completely randomly.
Pair Corralation between Natural Alternatives and LENSAR
Given the investment horizon of 90 days Natural Alternatives International is expected to under-perform the LENSAR. But the stock apears to be less risky and, when comparing its historical volatility, Natural Alternatives International is 1.55 times less risky than LENSAR. The stock trades about -0.02 of its potential returns per unit of risk. The LENSAR Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 322.00 in LENSAR Inc on August 29, 2024 and sell it today you would earn a total of 447.00 from holding LENSAR Inc or generate 138.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Alternatives Internati vs. LENSAR Inc
Performance |
| Timeline |
| Natural Alternatives |
| LENSAR Inc |
Natural Alternatives and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Alternatives and LENSAR
The main advantage of trading using opposite Natural Alternatives and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Alternatives position performs unexpectedly, LENSAR 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 LENSAR will offset losses from the drop in LENSAR's long position.| Natural Alternatives vs. Kellanova | Natural Alternatives vs. Lamb Weston Holdings | Natural Alternatives vs. Borealis Foods | Natural Alternatives vs. Central Garden Pet |
| LENSAR vs. Edwards Lifesciences Corp | LENSAR vs. Outset Medical | LENSAR vs. Venus Concept | LENSAR vs. DexCom Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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