Correlation Between Inogen and Haemonetics
Can any of the company-specific risk be diversified away by investing in both Inogen 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 Inogen and Haemonetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inogen Inc and Haemonetics, you can compare the effects of market volatilities on Inogen 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 Inogen with a short position of Haemonetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inogen and Haemonetics.
Diversification Opportunities for Inogen and Haemonetics
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inogen and Haemonetics is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Inogen Inc and Haemonetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haemonetics and Inogen 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 Inogen Inc 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 Inogen i.e., Inogen and Haemonetics go up and down completely randomly.
Pair Corralation between Inogen and Haemonetics
Given the investment horizon of 90 days Inogen Inc is expected to under-perform the Haemonetics. In addition to that, Inogen is 1.46 times more volatile than Haemonetics. It trades about -0.03 of its total potential returns per unit of risk. Haemonetics is currently generating about 0.02 per unit of volatility. If you would invest 7,447 in Haemonetics on September 22, 2024 and sell it today you would earn a total of 97.00 from holding Haemonetics or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inogen Inc vs. Haemonetics
Performance |
| Timeline |
| Inogen Inc |
| Haemonetics |
Inogen and Haemonetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inogen and Haemonetics
The main advantage of trading using opposite Inogen and Haemonetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inogen 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 Inogen Inc 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.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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