Correlation Between OraSure Technologies and InfuSystems Holdings

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

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

Diversification Opportunities for OraSure Technologies and InfuSystems Holdings

0.64

Correlation Coefficient

OraSure Technologies  InfuSystems Holdings

Poor diversification

The 3 months correlation between OraSure and InfuSystems is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding OraSure Technologies and InfuSystems Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfuSystems Holdings and OraSure Technologies 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 OraSure Technologies are associated (or correlated) with InfuSystems Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfuSystems Holdings has no effect on the direction of OraSure Technologies i.e., OraSure Technologies and InfuSystems Holdings go up and down completely randomly.

Pair Corralation between OraSure Technologies and InfuSystems Holdings

Given the investment horizon of 90 days OraSure Technologies is expected to generate 1.27 times more return on investment than InfuSystems Holdings. However, OraSure Technologies is 1.27 times more volatile than InfuSystems Holdings. It trades about 0.0 of its potential returns per unit of risk. InfuSystems Holdings is currently generating about -0.15 per unit of risk. If you would invest  362.00  in OraSure Technologies on December 23, 2024 and sell it today you would lose (18.00) from holding OraSure Technologies or give up 4.97% of portfolio value over 90 days.

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

OraSure Technologies  vs.  InfuSystems Holdings

OraSure Technologies

Risk-Adjusted Performance

Very Weak

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

InfuSystems Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days InfuSystems Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with OraSure Technologies and InfuSystems Holdings

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

The idea behind OraSure Technologies and InfuSystems Holdings 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.