Correlation Between Hanesbrands and Transurban
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Transurban 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 Transurban into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Transurban Group, you can compare the effects of market volatilities on Hanesbrands and Transurban 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 Transurban. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Transurban.
Diversification Opportunities for Hanesbrands and Transurban
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanesbrands and Transurban is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group 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 Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of Hanesbrands i.e., Hanesbrands and Transurban go up and down completely randomly.
Pair Corralation between Hanesbrands and Transurban
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.77 times more return on investment than Transurban. However, Hanesbrands is 2.77 times more volatile than Transurban Group. It trades about 0.15 of its potential returns per unit of risk. Transurban Group is currently generating about -0.08 per unit of risk. If you would invest 640.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 201.00 from holding Hanesbrands or generate 31.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hanesbrands vs. Transurban Group
Performance |
Timeline |
Hanesbrands |
Transurban Group |
Hanesbrands and Transurban Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanesbrands and Transurban
The main advantage of trading using opposite Hanesbrands and Transurban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Transurban 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 Transurban will offset losses from the drop in Transurban's long position.Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
Transurban vs. Superior Plus Corp | Transurban vs. SIVERS SEMICONDUCTORS AB | Transurban vs. Norsk Hydro ASA | Transurban vs. Reliance Steel Aluminum |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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