Correlation Between BioLife Solutions and Haemonetics

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

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

Diversification Opportunities for BioLife Solutions and Haemonetics

0.29

Correlation Coefficient

BioLife Solutions  Haemonetics

Modest diversification

The 3 months correlation between BioLife and Haemonetics is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding BioLife Solutions and Haemonetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haemonetics and BioLife Solutions 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 BioLife Solutions are associated (or correlated) with Haemonetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haemonetics has no effect on the direction of BioLife Solutions i.e., BioLife Solutions and Haemonetics go up and down completely randomly.

Pair Corralation between BioLife Solutions and Haemonetics

Given the investment horizon of 90 days BioLife Solutions is expected to generate 1.02 times more return on investment than Haemonetics. However, BioLife Solutions is 1.02 times more volatile than Haemonetics. It trades about 0.01 of its potential returns per unit of risk. Haemonetics is currently generating about -0.11 per unit of risk. If you would invest  2,627  in BioLife Solutions on December 30, 2024 and sell it today you would lose (31.00) from holding BioLife Solutions or give up 1.18% of portfolio value over 90 days.

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

BioLife Solutions  vs.  Haemonetics

BioLife Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days BioLife Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BioLife Solutions is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Haemonetics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Haemonetics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with BioLife Solutions and Haemonetics

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

The idea behind BioLife Solutions and Haemonetics 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 Transaction History module to view history of all your transactions and understand their impact on performance.