Correlation Between Haemonetics and Avita Medical
Can any of the company-specific risk be diversified away by investing in both Haemonetics and Avita Medical 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 Avita Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haemonetics and Avita Medical, you can compare the effects of market volatilities on Haemonetics and Avita Medical 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 Avita Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haemonetics and Avita Medical.
Diversification Opportunities for Haemonetics and Avita Medical
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haemonetics and Avita is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Haemonetics and Avita Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avita Medical 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 Avita Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avita Medical has no effect on the direction of Haemonetics i.e., Haemonetics and Avita Medical go up and down completely randomly.
Pair Corralation between Haemonetics and Avita Medical
Considering the 90-day investment horizon Haemonetics is expected to under-perform the Avita Medical. But the stock apears to be less risky and, when comparing its historical volatility, Haemonetics is 1.81 times less risky than Avita Medical. The stock trades about -0.3 of its potential returns per unit of risk. The Avita Medical is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,287 in Avita Medical on September 14, 2024 and sell it today you would lose (6.00) from holding Avita Medical or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haemonetics vs. Avita Medical
Performance |
| Timeline |
| Haemonetics |
| Avita Medical |
Haemonetics and Avita Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haemonetics and Avita Medical
The main advantage of trading using opposite Haemonetics and Avita Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haemonetics position performs unexpectedly, Avita Medical 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 Avita Medical will offset losses from the drop in Avita Medical's long position.| Haemonetics vs. Avita Medical | Haemonetics vs. Sight Sciences | Haemonetics vs. Treace Medical Concepts | Haemonetics vs. Neuropace |
| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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