Correlation Between Hanesbrands and Columbia Select

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

Diversification Opportunities for Hanesbrands and Columbia Select

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Hanesbrands and Columbia Select

If you would invest  2,063  in Columbia Select Large on September 6, 2024 and sell it today you would earn a total of  249.00  from holding Columbia Select Large or generate 12.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Hanesbrands  vs.  Columbia Select Large

 Performance 
       Timeline  
Hanesbrands 

Risk-Adjusted Performance

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Strong
Good
Over the last 90 days Hanesbrands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Hanesbrands is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
Columbia Select Large 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Select Large are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Select may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hanesbrands and Columbia Select Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hanesbrands and Columbia Select

The main advantage of trading using opposite Hanesbrands and Columbia Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Columbia Select 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 Columbia Select will offset losses from the drop in Columbia Select's long position.
The idea behind Hanesbrands and Columbia Select Large 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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