Correlation Between Aptorum Group and LENSAR

Can any of the company-specific risk be diversified away by investing in both Aptorum Group 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 Aptorum Group and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aptorum Group Ltd and LENSAR Inc, you can compare the effects of market volatilities on Aptorum Group 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 Aptorum Group with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptorum Group and LENSAR.

Diversification Opportunities for Aptorum Group and LENSAR

-0.6

Correlation Coefficient

Aptorum Group  LENSAR

Excellent diversification

The 3 months correlation between Aptorum and LENSAR is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Aptorum Group Ltd and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Aptorum Group 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 Aptorum Group 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 Aptorum Group i.e., Aptorum Group and LENSAR go up and down completely randomly.

Pair Corralation between Aptorum Group and LENSAR

Considering the 90-day investment horizon Aptorum Group Ltd is expected to generate 5.53 times more return on investment than LENSAR. However, Aptorum Group is 5.53 times more volatile than LENSAR Inc. It trades about 0.04 of its potential returns per unit of risk. LENSAR Inc is currently generating about 0.07 per unit of risk. If you would invest  243.00  in Aptorum Group Ltd on October 5, 2024 and sell it today you would lose (35.00) from holding Aptorum Group Ltd or give up 14.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.78%
Values	Daily Returns

Aptorum Group Ltd  vs.  LENSAR Inc

Aptorum Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aptorum Group Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Aptorum Group displayed solid returns over the last few months and may actually be approaching a breakup point.

LENSAR Inc

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, LENSAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptorum Group and LENSAR

The main advantage of trading using opposite Aptorum Group and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptorum Group 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.

The idea behind Aptorum Group Ltd and LENSAR Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.