Correlation Between Haemonetics and Kindred Healthcare

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Can any of the company-specific risk be diversified away by investing in both Haemonetics and Kindred Healthcare 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 Kindred Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haemonetics and Kindred Healthcare, you can compare the effects of market volatilities on Haemonetics and Kindred Healthcare 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 Kindred Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haemonetics and Kindred Healthcare.

Diversification Opportunities for Haemonetics and Kindred Healthcare

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Haemonetics and Kindred is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Haemonetics and Kindred Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kindred Healthcare 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 Kindred Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kindred Healthcare has no effect on the direction of Haemonetics i.e., Haemonetics and Kindred Healthcare go up and down completely randomly.

Pair Corralation between Haemonetics and Kindred Healthcare

If you would invest  7,428  in Haemonetics on December 29, 2023 and sell it today you would earn a total of  981.00  from holding Haemonetics or generate 13.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Haemonetics  vs.  Kindred Healthcare

 Performance 
       Timeline  
Haemonetics 

Risk-Adjusted Performance

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Over the last 90 days Haemonetics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Haemonetics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
Kindred Healthcare 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Kindred Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Kindred Healthcare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Haemonetics and Kindred Healthcare Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Haemonetics and Kindred Healthcare

The main advantage of trading using opposite Haemonetics and Kindred Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haemonetics position performs unexpectedly, Kindred Healthcare 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 Kindred Healthcare will offset losses from the drop in Kindred Healthcare's long position.
The idea behind Haemonetics and Kindred Healthcare 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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