Correlation Between Office Properties and Haemonetics

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

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

Diversification Opportunities for Office Properties and Haemonetics

-0.47

Correlation Coefficient

Office Properties  Haemonetics

Very good diversification

The 3 months correlation between Office and Haemonetics is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Office Properties Income and Haemonetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haemonetics and Office Properties 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 Office Properties Income 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 Office Properties i.e., Office Properties and Haemonetics go up and down completely randomly.

Pair Corralation between Office Properties and Haemonetics

Assuming the 90 days horizon Office Properties Income is expected to under-perform the Haemonetics. In addition to that, Office Properties is 1.3 times more volatile than Haemonetics. It trades about -0.05 of its total potential returns per unit of risk. Haemonetics is currently generating about -0.03 per unit of volatility. If you would invest  7,573  in Haemonetics on October 27, 2024 and sell it today you would lose (491.00) from holding Haemonetics or give up 6.48% of portfolio value over 90 days.

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

Office Properties Income  vs.  Haemonetics

Office Properties Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Office Properties Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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.

Pair Trading with Office Properties and Haemonetics

The main advantage of trading using opposite Office Properties and Haemonetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Office Properties 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 Office Properties Income 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.