Correlation Between Todos Medical and LENSAR

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

By analyzing existing cross correlation between Todos Medical and LENSAR Inc, you can compare the effects of market volatilities on Todos 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 Todos Medical with a short position of LENSAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Todos Medical and LENSAR.

Diversification Opportunities for Todos Medical and LENSAR

-0.09

Correlation Coefficient

Todos Medical  LENSAR

Good diversification

The 3 months correlation between Todos and LENSAR is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Todos Medical and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and Todos 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 Todos 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 Todos Medical i.e., Todos Medical and LENSAR go up and down completely randomly.

Pair Corralation between Todos Medical and LENSAR

If you would invest  425.00  in LENSAR Inc on September 15, 2024 and sell it today you would earn a total of  330.00  from holding LENSAR Inc or generate 77.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Todos Medical  vs.  LENSAR Inc

Todos Medical

Risk-Adjusted Performance

0 of 100

Very Weak

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

LENSAR Inc

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, LENSAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Todos Medical and LENSAR

The main advantage of trading using opposite Todos Medical and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Todos 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.

The idea behind Todos Medical and LENSAR 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.