Correlation Between LENSAR and Surgalign Holdings

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

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

Diversification Opportunities for LENSAR and Surgalign Holdings

-0.81

Correlation Coefficient

LENSAR  Surgalign Holdings

Pay attention - limited upside

The 3 months correlation between LENSAR and Surgalign is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding LENSAR Inc and Surgalign Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgalign Holdings 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 Surgalign Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgalign Holdings has no effect on the direction of LENSAR i.e., LENSAR and Surgalign Holdings go up and down completely randomly.

Pair Corralation between LENSAR and Surgalign Holdings

If you would invest  422.00  in LENSAR Inc on August 17, 2024 and sell it today you would earn a total of  298.00  from holding LENSAR Inc or generate 70.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

LENSAR Inc  vs.  Surgalign Holdings

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.

Surgalign Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surgalign Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Surgalign Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LENSAR and Surgalign Holdings

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

The idea behind LENSAR Inc and Surgalign Holdings 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.