Correlation Between Hanesbrands and Environmental Service

Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Environmental Service 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 Hanesbrands and Environmental Service into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hanesbrands and Environmental Service Professionals, you can compare the effects of market volatilities on Hanesbrands and Environmental Service 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 Hanesbrands with a short position of Environmental Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Environmental Service.

Diversification Opportunities for Hanesbrands and Environmental Service

0.0

Correlation Coefficient

Hanesbrands  Environmental Service

Pay attention - limited upside

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

Pair Corralation between Hanesbrands and Environmental Service

If you would invest  645.00  in Hanesbrands on September 4, 2024 and sell it today you would earn a total of  246.00  from holding Hanesbrands or generate 38.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hanesbrands  vs.  Environmental Service Professi

Hanesbrands

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Hanesbrands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Environmental Service

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Environmental Service Professionals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Environmental Service is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Hanesbrands and Environmental Service

The main advantage of trading using opposite Hanesbrands and Environmental Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Environmental Service 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 Environmental Service will offset losses from the drop in Environmental Service's long position.

The idea behind Hanesbrands and Environmental Service Professionals 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.