Correlation Between Treace Medical and LENSAR
Can any of the company-specific risk be diversified away by investing in both Treace Medical 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 Treace Medical and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treace Medical Concepts and LENSAR Inc, you can compare the effects of market volatilities on Treace Medical 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 Treace Medical with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treace Medical and LENSAR.
Diversification Opportunities for Treace Medical and LENSAR
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Treace and LENSAR is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Treace Medical Concepts and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Treace Medical 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 Treace Medical Concepts 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 Treace Medical i.e., Treace Medical and LENSAR go up and down completely randomly.
Pair Corralation between Treace Medical and LENSAR
Given the investment horizon of 90 days Treace Medical Concepts is expected to under-perform the LENSAR. In addition to that, Treace Medical is 1.09 times more volatile than LENSAR Inc. It trades about -0.01 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 322.00 in LENSAR Inc on August 27, 2024 and sell it today you would earn a total of 416.00 from holding LENSAR Inc or generate 129.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treace Medical Concepts vs. LENSAR Inc
Performance |
| Timeline |
| Treace Medical Concepts |
| LENSAR Inc |
Treace Medical and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treace Medical and LENSAR
The main advantage of trading using opposite Treace Medical and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treace Medical 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.| Treace Medical vs. Rxsight | Treace Medical vs. Axogen Inc | Treace Medical vs. Pulmonx Corp | Treace Medical vs. Orthofix Medical |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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