Correlation Between Haemonetics and Global Partners

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

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

Diversification Opportunities for Haemonetics and Global Partners

0.14

Correlation Coefficient

Haemonetics  Global Partners

Average diversification

The 3 months correlation between Haemonetics and Global is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Haemonetics and Global Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partners LP and Haemonetics 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 Haemonetics are associated (or correlated) with Global Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partners LP has no effect on the direction of Haemonetics i.e., Haemonetics and Global Partners go up and down completely randomly.

Pair Corralation between Haemonetics and Global Partners

Considering the 90-day investment horizon Haemonetics is expected to under-perform the Global Partners. In addition to that, Haemonetics is 10.8 times more volatile than Global Partners LP. It trades about -0.01 of its total potential returns per unit of risk. Global Partners LP is currently generating about 0.21 per unit of volatility. If you would invest  2,569  in Global Partners LP on October 25, 2024 and sell it today you would earn a total of  76.00  from holding Global Partners LP or generate 2.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Haemonetics  vs.  Global Partners LP

Haemonetics

Risk-Adjusted Performance

0 of 100

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 rather sound basic indicators, Haemonetics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Global Partners LP

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Partners LP are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Global Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Haemonetics and Global Partners

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

The idea behind Haemonetics and Global Partners LP 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.