Correlation Between Hanesbrands and Linzhou Heavy
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By analyzing existing cross correlation between Hanesbrands and Linzhou Heavy Machinery, you can compare the effects of market volatilities on Hanesbrands and Linzhou Heavy 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 Linzhou Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Linzhou Heavy.
Diversification Opportunities for Hanesbrands and Linzhou Heavy
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanesbrands and Linzhou is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Linzhou Heavy Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linzhou Heavy Machinery 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 Linzhou Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linzhou Heavy Machinery has no effect on the direction of Hanesbrands i.e., Hanesbrands and Linzhou Heavy go up and down completely randomly.
Pair Corralation between Hanesbrands and Linzhou Heavy
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.61 times more return on investment than Linzhou Heavy. However, Hanesbrands is 1.61 times more volatile than Linzhou Heavy Machinery. It trades about 0.23 of its potential returns per unit of risk. Linzhou Heavy Machinery is currently generating about 0.3 per unit of risk. If you would invest 712.00 in Hanesbrands on September 4, 2024 and sell it today you would earn a total of 155.00 from holding Hanesbrands or generate 21.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hanesbrands vs. Linzhou Heavy Machinery
Performance |
| Timeline |
| Hanesbrands |
| Linzhou Heavy Machinery |
Hanesbrands and Linzhou Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Linzhou Heavy
The main advantage of trading using opposite Hanesbrands and Linzhou Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Linzhou Heavy 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 Linzhou Heavy will offset losses from the drop in Linzhou Heavy's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Linzhou Heavy vs. Chengdu Kanghua Biological | Linzhou Heavy vs. Beijing Wantai Biological | Linzhou Heavy vs. Suzhou Novoprotein Scientific | Linzhou Heavy vs. Aluminum Corp of |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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