Correlation Between EZGO Technologies and Hanesbrands
Can any of the company-specific risk be diversified away by investing in both EZGO Technologies and Hanesbrands 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 EZGO Technologies and Hanesbrands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EZGO Technologies and Hanesbrands, you can compare the effects of market volatilities on EZGO Technologies and Hanesbrands 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 EZGO Technologies with a short position of Hanesbrands. Check out your portfolio center. Please also check ongoing floating volatility patterns of EZGO Technologies and Hanesbrands.
Diversification Opportunities for EZGO Technologies and Hanesbrands
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EZGO and Hanesbrands is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding EZGO Technologies and Hanesbrands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanesbrands and EZGO Technologies 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 EZGO Technologies are associated (or correlated) with Hanesbrands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanesbrands has no effect on the direction of EZGO Technologies i.e., EZGO Technologies and Hanesbrands go up and down completely randomly.
Pair Corralation between EZGO Technologies and Hanesbrands
Given the investment horizon of 90 days EZGO Technologies is expected to under-perform the Hanesbrands. But the stock apears to be less risky and, when comparing its historical volatility, EZGO Technologies is 1.22 times less risky than Hanesbrands. The stock trades about -0.21 of its potential returns per unit of risk. The Hanesbrands is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 716.00 in Hanesbrands on August 31, 2024 and sell it today you would earn a total of 158.00 from holding Hanesbrands or generate 22.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EZGO Technologies vs. Hanesbrands
Performance |
| Timeline |
| EZGO Technologies |
| Hanesbrands |
EZGO Technologies and Hanesbrands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EZGO Technologies and Hanesbrands
The main advantage of trading using opposite EZGO Technologies and Hanesbrands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EZGO Technologies position performs unexpectedly, Hanesbrands 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 Hanesbrands will offset losses from the drop in Hanesbrands' long position.| EZGO Technologies vs. Vision Marine Technologies | EZGO Technologies vs. Marine Products | EZGO Technologies vs. Thor Industries | EZGO Technologies vs. BRP Inc |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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