Correlation Between Penumbra and LENSAR
Can any of the company-specific risk be diversified away by investing in both Penumbra 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 Penumbra and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penumbra and LENSAR Inc, you can compare the effects of market volatilities on Penumbra 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 Penumbra with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penumbra and LENSAR.
Diversification Opportunities for Penumbra and LENSAR
Almost no diversification
The 3 months correlation between Penumbra and LENSAR is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Penumbra and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Penumbra 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 Penumbra 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 Penumbra i.e., Penumbra and LENSAR go up and down completely randomly.
Pair Corralation between Penumbra and LENSAR
Considering the 90-day investment horizon Penumbra is expected to generate 0.63 times more return on investment than LENSAR. However, Penumbra is 1.58 times less risky than LENSAR. It trades about 0.14 of its potential returns per unit of risk. LENSAR Inc is currently generating about 0.05 per unit of risk. If you would invest 24,207 in Penumbra on September 12, 2024 and sell it today you would earn a total of 1,289 from holding Penumbra or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penumbra vs. LENSAR Inc
Performance |
| Timeline |
| Penumbra |
| LENSAR Inc |
Penumbra and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penumbra and LENSAR
The main advantage of trading using opposite Penumbra and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penumbra 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.| Penumbra vs. Insulet | Penumbra vs. TransMedics Group | Penumbra vs. Masimo | Penumbra vs. Inspire Medical Systems |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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