Correlation Between ZimVie and LENSAR
Can any of the company-specific risk be diversified away by investing in both ZimVie 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 ZimVie and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZimVie Inc and LENSAR Inc, you can compare the effects of market volatilities on ZimVie 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 ZimVie with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZimVie and LENSAR.
Diversification Opportunities for ZimVie and LENSAR
Pay attention - limited upside
The 3 months correlation between ZimVie and LENSAR is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding ZimVie Inc and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and ZimVie 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 ZimVie Inc 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 ZimVie i.e., ZimVie and LENSAR go up and down completely randomly.
Pair Corralation between ZimVie and LENSAR
Given the investment horizon of 90 days ZimVie is expected to generate 6.86 times less return on investment than LENSAR. But when comparing it to its historical volatility, ZimVie Inc is 3.02 times less risky than LENSAR. It trades about 0.16 of its potential returns per unit of risk. LENSAR Inc is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 538.00 in LENSAR Inc on September 2, 2024 and sell it today you would earn a total of 215.00 from holding LENSAR Inc or generate 39.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZimVie Inc vs. LENSAR Inc
Performance |
| Timeline |
| ZimVie Inc |
| LENSAR Inc |
ZimVie and LENSAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZimVie and LENSAR
The main advantage of trading using opposite ZimVie and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZimVie 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.| ZimVie vs. Stryker | ZimVie vs. Boston Scientific Corp | ZimVie vs. STERIS plc | ZimVie vs. Smith Nephew SNATS |
| LENSAR vs. Profound Medical Corp | LENSAR vs. Si Bone | LENSAR vs. Nevro Corp | LENSAR vs. Orthopediatrics Corp |
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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