Correlation Between Hanesbrands and GPT
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and GPT 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 GPT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and GPT Group, you can compare the effects of market volatilities on Hanesbrands and GPT 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 GPT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and GPT.
Diversification Opportunities for Hanesbrands and GPT
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanesbrands and GPT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and GPT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GPT Group 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 GPT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GPT Group has no effect on the direction of Hanesbrands i.e., Hanesbrands and GPT go up and down completely randomly.
Pair Corralation between Hanesbrands and GPT
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.31 times more return on investment than GPT. However, Hanesbrands is 1.31 times more volatile than GPT Group. It trades about 0.15 of its potential returns per unit of risk. GPT Group is currently generating about -0.06 per unit of risk. If you would invest 640.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 201.00 from holding Hanesbrands or generate 31.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Hanesbrands vs. GPT Group
Performance |
| Timeline |
| Hanesbrands |
| GPT Group |
Hanesbrands and GPT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and GPT
The main advantage of trading using opposite Hanesbrands and GPT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, GPT 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 GPT will offset losses from the drop in GPT's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| GPT vs. Superior Plus Corp | GPT vs. SIVERS SEMICONDUCTORS AB | GPT vs. CHINA HUARONG ENERHD 50 | GPT vs. NORDIC HALIBUT AS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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