Correlation Between LENSAR and AMERICAN

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

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

Diversification Opportunities for LENSAR and AMERICAN

-0.5

Correlation Coefficient

LENSAR  AMERICAN

Very good diversification

The 3 months correlation between LENSAR and AMERICAN is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and AMERICAN TOWER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN TOWER P 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN TOWER P has no effect on the direction of LENSAR i.e., LENSAR and AMERICAN go up and down completely randomly.

Pair Corralation between LENSAR and AMERICAN

Given the investment horizon of 90 days LENSAR Inc is expected to generate 14.6 times more return on investment than AMERICAN. However, LENSAR is 14.6 times more volatile than AMERICAN TOWER P. It trades about 0.07 of its potential returns per unit of risk. AMERICAN TOWER P is currently generating about -0.01 per unit of risk. If you would invest  272.00  in LENSAR Inc on October 11, 2024 and sell it today you would earn a total of  563.00  from holding LENSAR Inc or generate 206.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

LENSAR Inc  vs.  AMERICAN TOWER P

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.

AMERICAN TOWER P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMERICAN TOWER P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AMERICAN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LENSAR and AMERICAN

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

The idea behind LENSAR Inc and AMERICAN TOWER P 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..