Correlation Between Haemonetics and Direct Line
Can any of the company-specific risk be diversified away by investing in both Haemonetics and Direct Line 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 Direct Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haemonetics and Direct Line Insurance, you can compare the effects of market volatilities on Haemonetics and Direct Line 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 Direct Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haemonetics and Direct Line.
Diversification Opportunities for Haemonetics and Direct Line
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Haemonetics and Direct is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Haemonetics and Direct Line Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Line Insurance 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 Direct Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Line Insurance has no effect on the direction of Haemonetics i.e., Haemonetics and Direct Line go up and down completely randomly.
Pair Corralation between Haemonetics and Direct Line
Considering the 90-day investment horizon Haemonetics is expected to under-perform the Direct Line. In addition to that, Haemonetics is 1.32 times more volatile than Direct Line Insurance. It trades about -0.26 of its total potential returns per unit of risk. Direct Line Insurance is currently generating about 0.3 per unit of volatility. If you would invest 1,267 in Direct Line Insurance on November 2, 2024 and sell it today you would earn a total of 130.00 from holding Direct Line Insurance or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haemonetics vs. Direct Line Insurance
Performance |
| Timeline |
| Haemonetics |
| Direct Line Insurance |
Haemonetics and Direct Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haemonetics and Direct Line
The main advantage of trading using opposite Haemonetics and Direct Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haemonetics position performs unexpectedly, Direct Line 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 Direct Line will offset losses from the drop in Direct Line's long position.| Haemonetics vs. Merit Medical Systems | Haemonetics vs. AngioDynamics | Haemonetics vs. AptarGroup | Haemonetics vs. Envista Holdings Corp |
| Direct Line vs. AG Mortgage Investment | Direct Line vs. Old Republic International | Direct Line vs. Conifer Holdings, 975 | Direct Line vs. Fidus Investment Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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