Correlation Between Hanesbrands and ACE EV
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and ACE EV 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 ACE EV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and ACE EV Value, you can compare the effects of market volatilities on Hanesbrands and ACE EV 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 ACE EV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and ACE EV.
Diversification Opportunities for Hanesbrands and ACE EV
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanesbrands and ACE is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and ACE EV Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACE EV Value 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 ACE EV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACE EV Value has no effect on the direction of Hanesbrands i.e., Hanesbrands and ACE EV go up and down completely randomly.
Pair Corralation between Hanesbrands and ACE EV
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.47 times more return on investment than ACE EV. However, Hanesbrands is 1.47 times more volatile than ACE EV Value. It trades about 0.04 of its potential returns per unit of risk. ACE EV Value is currently generating about 0.0 per unit of risk. If you would invest 637.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 233.00 from holding Hanesbrands or generate 36.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
Hanesbrands vs. ACE EV Value
Performance |
| Timeline |
| Hanesbrands |
| ACE EV Value |
Hanesbrands and ACE EV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and ACE EV
The main advantage of trading using opposite Hanesbrands and ACE EV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, ACE EV 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 ACE EV will offset losses from the drop in ACE EV's long position.| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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