Correlation Between Haemonetics and Pro Dex

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

By analyzing existing cross correlation between Haemonetics and Pro Dex, you can compare the effects of market volatilities on Haemonetics and Pro Dex 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 Pro Dex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haemonetics and Pro Dex.

Diversification Opportunities for Haemonetics and Pro Dex

0.72

Correlation Coefficient

Haemonetics  Pro Dex

Poor diversification

The 3 months correlation between Haemonetics and Pro is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Haemonetics and Pro Dex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Dex 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 Pro Dex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Dex has no effect on the direction of Haemonetics i.e., Haemonetics and Pro Dex go up and down completely randomly.

Pair Corralation between Haemonetics and Pro Dex

Considering the 90-day investment horizon Haemonetics is expected to generate 2.9 times less return on investment than Pro Dex. But when comparing it to its historical volatility, Haemonetics is 1.84 times less risky than Pro Dex. It trades about 0.29 of its potential returns per unit of risk. Pro Dex is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  2,835  in Pro Dex on August 17, 2024 and sell it today you would earn a total of  1,946  from holding Pro Dex or generate 68.64% return on investment over 90 days.

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

Haemonetics  vs.  Pro Dex

Haemonetics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Haemonetics are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Haemonetics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pro Dex

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Dex are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Pro Dex showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Haemonetics and Pro Dex

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

The idea behind Haemonetics and Pro Dex 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.