Correlation Between Gildan Activewear and Hanesbrands
Can any of the company-specific risk be diversified away by investing in both Gildan Activewear 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 Gildan Activewear and Hanesbrands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gildan Activewear and Hanesbrands, you can compare the effects of market volatilities on Gildan Activewear 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 Gildan Activewear with a short position of Hanesbrands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gildan Activewear and Hanesbrands.
Diversification Opportunities for Gildan Activewear and Hanesbrands
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gildan and Hanesbrands is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gildan Activewear and Hanesbrands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanesbrands and Gildan Activewear 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 Gildan Activewear 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 Gildan Activewear i.e., Gildan Activewear and Hanesbrands go up and down completely randomly.
Pair Corralation between Gildan Activewear and Hanesbrands
Considering the 90-day investment horizon Gildan Activewear is expected to generate 1.43 times less return on investment than Hanesbrands. But when comparing it to its historical volatility, Gildan Activewear is 2.4 times less risky than Hanesbrands. It trades about 0.14 of its potential returns per unit of risk. Hanesbrands is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 540.00 in Hanesbrands on August 27, 2024 and sell it today you would earn a total of 314.00 from holding Hanesbrands or generate 58.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gildan Activewear vs. Hanesbrands
Performance |
| Timeline |
| Gildan Activewear |
| Hanesbrands |
Gildan Activewear and Hanesbrands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gildan Activewear and Hanesbrands
The main advantage of trading using opposite Gildan Activewear and Hanesbrands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gildan Activewear 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.| Gildan Activewear vs. Vince Holding Corp | Gildan Activewear vs. Ermenegildo Zegna NV | Gildan Activewear vs. Columbia Sportswear | Gildan Activewear vs. G III Apparel Group |
| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges |