Correlation Between Avita Medical and LENSAR
Can any of the company-specific risk be diversified away by investing in both Avita Medical 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 Avita Medical and LENSAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avita Medical and LENSAR Inc, you can compare the effects of market volatilities on Avita Medical 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 Avita Medical with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avita Medical and LENSAR.
Diversification Opportunities for Avita Medical and LENSAR
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avita and LENSAR is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Avita Medical and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Avita Medical 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 Avita Medical 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 Avita Medical i.e., Avita Medical and LENSAR go up and down completely randomly.
Pair Corralation between Avita Medical and LENSAR
Given the investment horizon of 90 days Avita Medical is expected to under-perform the LENSAR. In addition to that, Avita Medical is 1.04 times more volatile than LENSAR Inc. It trades about -0.06 of its total potential returns per unit of risk. LENSAR Inc is currently generating about 0.17 per unit of volatility. If you would invest 838.00 in LENSAR Inc on December 27, 2024 and sell it today you would earn a total of 576.00 from holding LENSAR Inc or generate 68.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Avita Medical vs. LENSAR Inc
Performance |
Timeline |
Avita Medical |
LENSAR Inc |
Avita Medical and LENSAR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Avita Medical and LENSAR
The main advantage of trading using opposite Avita Medical and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avita Medical 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.Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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