Correlation Between Hanesbrands and 30040WAR9

Can any of the company-specific risk be diversified away by investing in both Hanesbrands and 30040WAR9 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 30040WAR9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hanesbrands and ES 46 01 JUL 27, you can compare the effects of market volatilities on Hanesbrands and 30040WAR9 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 30040WAR9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and 30040WAR9.

Diversification Opportunities for Hanesbrands and 30040WAR9

-0.83

Correlation Coefficient

Hanesbrands  30040WAR9

Pay attention - limited upside

The 3 months correlation between Hanesbrands and 30040WAR9 is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and ES 46 01 JUL 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 30040WAR9 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 30040WAR9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 30040WAR9 has no effect on the direction of Hanesbrands i.e., Hanesbrands and 30040WAR9 go up and down completely randomly.

Pair Corralation between Hanesbrands and 30040WAR9

Considering the 90-day investment horizon Hanesbrands is expected to generate 5.67 times more return on investment than 30040WAR9. However, Hanesbrands is 5.67 times more volatile than ES 46 01 JUL 27. It trades about 0.18 of its potential returns per unit of risk. ES 46 01 JUL 27 is currently generating about -0.13 per unit of risk. 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	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Hanesbrands  vs.  ES 46 01 JUL 27

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.

30040WAR9

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ES 46 01 JUL 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 30040WAR9 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hanesbrands and 30040WAR9

The main advantage of trading using opposite Hanesbrands and 30040WAR9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, 30040WAR9 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 30040WAR9 will offset losses from the drop in 30040WAR9's long position.

The idea behind Hanesbrands and ES 46 01 JUL 27 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.