Correlation Between Hanesbrands and Boai NKY
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By analyzing existing cross correlation between Hanesbrands and Boai NKY Pharmaceuticals, you can compare the effects of market volatilities on Hanesbrands and Boai NKY 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 Boai NKY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Boai NKY.
Diversification Opportunities for Hanesbrands and Boai NKY
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanesbrands and Boai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Boai NKY Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boai NKY Pharmaceuticals 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 Boai NKY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boai NKY Pharmaceuticals has no effect on the direction of Hanesbrands i.e., Hanesbrands and Boai NKY go up and down completely randomly.
Pair Corralation between Hanesbrands and Boai NKY
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.71 times less return on investment than Boai NKY. But when comparing it to its historical volatility, Hanesbrands is 1.16 times less risky than Boai NKY. It trades about 0.21 of its potential returns per unit of risk. Boai NKY Pharmaceuticals is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,264 in Boai NKY Pharmaceuticals on September 5, 2024 and sell it today you would earn a total of 511.00 from holding Boai NKY Pharmaceuticals or generate 40.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hanesbrands vs. Boai NKY Pharmaceuticals
Performance |
| Timeline |
| Hanesbrands |
| Boai NKY Pharmaceuticals |
Hanesbrands and Boai NKY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Boai NKY
The main advantage of trading using opposite Hanesbrands and Boai NKY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Boai NKY 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 Boai NKY will offset losses from the drop in Boai NKY's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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