Correlation Between Top KingWin and LENSAR
Can any of the company-specific risk be diversified away by investing in both Top KingWin 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 Top KingWin and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top KingWin Ltd and LENSAR Inc, you can compare the effects of market volatilities on Top KingWin 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 Top KingWin with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top KingWin and LENSAR.
Diversification Opportunities for Top KingWin and LENSAR
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Top and LENSAR is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Top KingWin Ltd and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Top KingWin 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 Top KingWin Ltd 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 Top KingWin i.e., Top KingWin and LENSAR go up and down completely randomly.
Pair Corralation between Top KingWin and LENSAR
Given the investment horizon of 90 days Top KingWin Ltd is expected to under-perform the LENSAR. In addition to that, Top KingWin is 1.8 times more volatile than LENSAR Inc. It trades about -0.04 of its total potential returns per unit of risk. LENSAR Inc is currently generating about 0.06 per unit of volatility. If you would invest 381.00 in LENSAR Inc on August 31, 2024 and sell it today you would earn a total of 372.00 from holding LENSAR Inc or generate 97.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 92.25% |
| Values | Daily Returns |
Top KingWin Ltd vs. LENSAR Inc
Performance |
| Timeline |
| Top KingWin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| LENSAR Inc |
Top KingWin and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top KingWin and LENSAR
The main advantage of trading using opposite Top KingWin and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top KingWin 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.| Top KingWin vs. Neogen | Top KingWin vs. RadNet Inc | Top KingWin vs. Teleflex Incorporated | Top KingWin vs. JBG SMITH Properties |
| LENSAR vs. Abbott Laboratories | LENSAR vs. Medtronic PLC | LENSAR vs. Edwards Lifesciences Corp | LENSAR vs. ZimVie 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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