Correlation Between InfuSystems Holdings and Haemonetics

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

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

Diversification Opportunities for InfuSystems Holdings and Haemonetics

0.82

Correlation Coefficient

InfuSystems Holdings  Haemonetics

Very poor diversification

The 3 months correlation between InfuSystems and Haemonetics is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding InfuSystems Holdings and Haemonetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haemonetics and InfuSystems Holdings 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 InfuSystems Holdings 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 InfuSystems Holdings i.e., InfuSystems Holdings and Haemonetics go up and down completely randomly.

Pair Corralation between InfuSystems Holdings and Haemonetics

Given the investment horizon of 90 days InfuSystems Holdings is expected to under-perform the Haemonetics. In addition to that, InfuSystems Holdings is 1.86 times more volatile than Haemonetics. It trades about -0.21 of its total potential returns per unit of risk. Haemonetics is currently generating about -0.18 per unit of volatility. If you would invest  8,334  in Haemonetics on October 12, 2024 and sell it today you would lose (524.00) from holding Haemonetics or give up 6.29% of portfolio value over 90 days.

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

InfuSystems Holdings  vs.  Haemonetics

InfuSystems Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in InfuSystems Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, InfuSystems Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Haemonetics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Haemonetics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with InfuSystems Holdings and Haemonetics

The main advantage of trading using opposite InfuSystems Holdings and Haemonetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InfuSystems Holdings 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 InfuSystems Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.