Correlation Between Hanesbrands and Ivy Mid

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

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

Diversification Opportunities for Hanesbrands and Ivy Mid

0.49

Correlation Coefficient

Hanesbrands  Ivy Mid

Very weak diversification

The 3 months correlation between Hanesbrands and Ivy is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Ivy Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Mid Cap 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 Ivy Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Mid Cap has no effect on the direction of Hanesbrands i.e., Hanesbrands and Ivy Mid go up and down completely randomly.

Pair Corralation between Hanesbrands and Ivy Mid

Considering the 90-day investment horizon Hanesbrands is expected to generate 2.41 times more return on investment than Ivy Mid. However, Hanesbrands is 2.41 times more volatile than Ivy Mid Cap. It trades about 0.15 of its potential returns per unit of risk. Ivy Mid Cap is currently generating about 0.0 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 Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Hanesbrands  vs.  Ivy Mid Cap

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.

Ivy Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivy Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ivy Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hanesbrands and Ivy Mid

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

The idea behind Hanesbrands and Ivy Mid Cap 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.