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

0.55

Correlation Coefficient

InfuSystems Holdings  Haemonetics

Very weak diversification

The 3 months correlation between InfuSystems and Haemonetics is 0.55. 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 generate 1.71 times more return on investment than Haemonetics. However, InfuSystems Holdings is 1.71 times more volatile than Haemonetics. It trades about 0.0 of its potential returns per unit of risk. Haemonetics is currently generating about -0.05 per unit of risk. If you would invest  683.00  in InfuSystems Holdings on June 29, 2024 and sell it today you would lose (27.00) from holding InfuSystems Holdings or give up 3.95% of portfolio value over 90 days.

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

InfuSystems Holdings  vs.  Haemonetics

InfuSystems Holdings

Risk-Adjusted Performance

0 of 100

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 comparatively stable technical and fundamental indicators, InfuSystems Holdings is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private 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 latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.