Correlation Between UMAX Group and LENSAR

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

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

Diversification Opportunities for UMAX Group and LENSAR

-0.18

Correlation Coefficient

UMAX Group  LENSAR

Good diversification

The 3 months correlation between UMAX and LENSAR is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding UMAX Group Corp and LENSAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENSAR Inc and UMAX Group 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 UMAX Group 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 UMAX Group i.e., UMAX Group and LENSAR go up and down completely randomly.

Pair Corralation between UMAX Group and LENSAR

Given the investment horizon of 90 days UMAX Group Corp is expected to generate 8.53 times more return on investment than LENSAR. However, UMAX Group is 8.53 times more volatile than LENSAR Inc. It trades about 0.13 of its potential returns per unit of risk. LENSAR Inc is currently generating about -0.07 per unit of risk. If you would invest  0.01  in UMAX Group Corp on May 7, 2025 and sell it today you would earn a total of  0.01  from holding UMAX Group Corp or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

UMAX Group Corp  vs.  LENSAR Inc

UMAX Group Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UMAX Group Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, UMAX Group showed solid returns over the last few months and may actually be approaching a breakup point.

LENSAR Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days LENSAR Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, LENSAR is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with UMAX Group and LENSAR

The main advantage of trading using opposite UMAX Group and LENSAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UMAX Group 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 UMAX Group Corp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.