Correlation Between LENSAR and Axogen

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

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

Diversification Opportunities for LENSAR and Axogen

0.08

Correlation Coefficient

LENSAR  Axogen

Significant diversification

The 3 months correlation between LENSAR and Axogen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Axogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axogen 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 Axogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axogen Inc has no effect on the direction of LENSAR i.e., LENSAR and Axogen go up and down completely randomly.

Pair Corralation between LENSAR and Axogen

Given the investment horizon of 90 days LENSAR Inc is expected to generate 1.15 times more return on investment than Axogen. However, LENSAR is 1.15 times more volatile than Axogen Inc. It trades about 0.05 of its potential returns per unit of risk. Axogen Inc is currently generating about 0.03 per unit of risk. If you would invest  359.00  in LENSAR Inc on August 17, 2024 and sell it today you would earn a total of  361.00  from holding LENSAR Inc or generate 100.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

LENSAR Inc  vs.  Axogen Inc

LENSAR Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in LENSAR Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, LENSAR reported solid returns over the last few months and may actually be approaching a breakup point.

Axogen Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axogen Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Axogen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with LENSAR and Axogen

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

The idea behind LENSAR Inc and Axogen 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..