Correlation Between LENSAR and NEWELL

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

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

Diversification Opportunities for LENSAR and NEWELL

-0.67

Correlation Coefficient

LENSAR  NEWELL

Excellent diversification

The 3 months correlation between LENSAR and NEWELL is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and NEWELL BRANDS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWELL BRANDS INC 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 NEWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWELL BRANDS INC has no effect on the direction of LENSAR i.e., LENSAR and NEWELL go up and down completely randomly.

Pair Corralation between LENSAR and NEWELL

Given the investment horizon of 90 days LENSAR Inc is expected to generate 4.14 times more return on investment than NEWELL. However, LENSAR is 4.14 times more volatile than NEWELL BRANDS INC. It trades about 0.16 of its potential returns per unit of risk. NEWELL BRANDS INC is currently generating about -0.17 per unit of risk. If you would invest  866.00  in LENSAR Inc on December 30, 2024 and sell it today you would earn a total of  547.00  from holding LENSAR Inc or generate 63.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

LENSAR Inc  vs.  NEWELL BRANDS INC

LENSAR Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 12 (%) 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.

NEWELL BRANDS INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEWELL BRANDS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for NEWELL BRANDS INC investors.

Pair Trading with LENSAR and NEWELL

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

The idea behind LENSAR Inc and NEWELL BRANDS 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.