Correlation Between LENSAR and FDG Electric

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

By analyzing existing cross correlation between LENSAR Inc and FDG Electric Vehicles, you can compare the effects of market volatilities on LENSAR and FDG Electric 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 FDG Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of LENSAR and FDG Electric.

Diversification Opportunities for LENSAR and FDG Electric

0.0

Correlation Coefficient

LENSAR  FDG Electric

Pay attention - limited upside

The 3 months correlation between LENSAR and FDG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and FDG Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDG Electric Vehicles 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 FDG Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDG Electric Vehicles has no effect on the direction of LENSAR i.e., LENSAR and FDG Electric go up and down completely randomly.

Pair Corralation between LENSAR and FDG Electric

If you would invest  560.00  in LENSAR Inc on October 26, 2024 and sell it today you would earn a total of  360.00  from holding LENSAR Inc or generate 64.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

LENSAR Inc  vs.  FDG Electric Vehicles

LENSAR Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 16 (%) 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.

FDG Electric Vehicles

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FDG Electric Vehicles has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, FDG Electric is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with LENSAR and FDG Electric

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

The idea behind LENSAR Inc and FDG Electric Vehicles 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..