Correlation Between LENSAR and ANTA Sports

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

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

Diversification Opportunities for LENSAR and ANTA Sports

0.87

Correlation Coefficient

LENSAR  ANTA Sports

Very poor diversification

The 3 months correlation between LENSAR and ANTA is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and ANTA Sports Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA Sports Products and LENSAR 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 LENSAR Inc are associated (or correlated) with ANTA Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA Sports Products has no effect on the direction of LENSAR i.e., LENSAR and ANTA Sports go up and down completely randomly.

Pair Corralation between LENSAR and ANTA Sports

Given the investment horizon of 90 days LENSAR Inc is expected to generate 2.93 times more return on investment than ANTA Sports. However, LENSAR is 2.93 times more volatile than ANTA Sports Products. It trades about 0.24 of its potential returns per unit of risk. ANTA Sports Products is currently generating about 0.21 per unit of risk. If you would invest  750.00  in LENSAR Inc on December 19, 2024 and sell it today you would earn a total of  806.00  from holding LENSAR Inc or generate 107.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

LENSAR Inc  vs.  ANTA Sports Products

LENSAR Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 18 (%) 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.

ANTA Sports Products

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANTA Sports Products are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, ANTA Sports showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LENSAR and ANTA Sports

The main advantage of trading using opposite LENSAR and ANTA Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LENSAR position performs unexpectedly, ANTA Sports 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 ANTA Sports will offset losses from the drop in ANTA Sports' long position.

The idea behind LENSAR Inc and ANTA Sports Products 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.