Correlation Between Hanesbrands and Blockchain Technologies

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

By analyzing existing cross correlation between Hanesbrands and Blockchain Technologies ETF, you can compare the effects of market volatilities on Hanesbrands and Blockchain Technologies 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 Blockchain Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Blockchain Technologies.

Diversification Opportunities for Hanesbrands and Blockchain Technologies

0.9

Correlation Coefficient

Hanesbrands  Blockchain Technologies

Almost no diversification

The 3 months correlation between Hanesbrands and Blockchain is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Blockchain Technologies ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Technologies 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 Blockchain Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Technologies has no effect on the direction of Hanesbrands i.e., Hanesbrands and Blockchain Technologies go up and down completely randomly.

Pair Corralation between Hanesbrands and Blockchain Technologies

Considering the 90-day investment horizon Hanesbrands is expected to generate 1.19 times less return on investment than Blockchain Technologies. In addition to that, Hanesbrands is 1.01 times more volatile than Blockchain Technologies ETF. It trades about 0.15 of its total potential returns per unit of risk. Blockchain Technologies ETF is currently generating about 0.18 per unit of volatility. If you would invest  1,489  in Blockchain Technologies ETF on September 12, 2024 and sell it today you would earn a total of  584.00  from holding Blockchain Technologies ETF or generate 39.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Hanesbrands  vs.  Blockchain Technologies ETF

Hanesbrands

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 12 (%) 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.

Blockchain Technologies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blockchain Technologies ETF are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Blockchain Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanesbrands and Blockchain Technologies

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

The idea behind Hanesbrands and Blockchain Technologies ETF 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.