Correlation Between Northann Corp and LENSAR
Can any of the company-specific risk be diversified away by investing in both Northann Corp 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 Northann Corp and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northann Corp and LENSAR Inc, you can compare the effects of market volatilities on Northann Corp 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 Northann Corp with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northann Corp and LENSAR.
Diversification Opportunities for Northann Corp and LENSAR
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Northann and LENSAR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Northann Corp and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Northann Corp 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 Northann Corp 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 Northann Corp i.e., Northann Corp and LENSAR go up and down completely randomly.
Pair Corralation between Northann Corp and LENSAR
Considering the 90-day investment horizon Northann Corp is expected to generate 5.83 times less return on investment than LENSAR. In addition to that, Northann Corp is 2.26 times more volatile than LENSAR Inc. It trades about 0.01 of its total potential returns per unit of risk. LENSAR Inc is currently generating about 0.07 per unit of volatility. 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 Together |
Strength | Strong |
Accuracy | 62.02% |
Values | Daily Returns |
Northann Corp vs. LENSAR Inc
Performance |
Timeline |
Northann Corp |
LENSAR Inc |
Northann Corp and LENSAR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Northann Corp and LENSAR
The main advantage of trading using opposite Northann Corp and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northann Corp 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.Northann Corp vs. LENSAR Inc | Northann Corp vs. Aquestive Therapeutics | Northann Corp vs. Acco Brands | Northann Corp vs. ARIA Wireless Systems |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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