Correlation Between Hanesbrands and FUJITSU
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and FUJITSU 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 FUJITSU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and FUJITSU LTD ADR, you can compare the effects of market volatilities on Hanesbrands and FUJITSU 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 FUJITSU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and FUJITSU.
Diversification Opportunities for Hanesbrands and FUJITSU
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and FUJITSU is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and FUJITSU LTD ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUJITSU LTD ADR 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 FUJITSU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUJITSU LTD ADR has no effect on the direction of Hanesbrands i.e., Hanesbrands and FUJITSU go up and down completely randomly.
Pair Corralation between Hanesbrands and FUJITSU
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.85 times more return on investment than FUJITSU. However, Hanesbrands is 1.85 times more volatile than FUJITSU LTD ADR. It trades about 0.04 of its potential returns per unit of risk. FUJITSU LTD ADR is currently generating about 0.05 per unit of risk. If you would invest 588.00 in Hanesbrands on September 7, 2024 and sell it today you would earn a total of 273.00 from holding Hanesbrands or generate 46.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.02% |
Values | Daily Returns |
Hanesbrands vs. FUJITSU LTD ADR
Performance |
Timeline |
Hanesbrands |
FUJITSU LTD ADR |
Hanesbrands and FUJITSU Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanesbrands and FUJITSU
The main advantage of trading using opposite Hanesbrands and FUJITSU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, FUJITSU 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 FUJITSU will offset losses from the drop in FUJITSU's long position.Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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