Correlation Between Hanesbrands and Asia Tech
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Asia Tech 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 Asia Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Asia Tech Image, you can compare the effects of market volatilities on Hanesbrands and Asia Tech 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 Asia Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Asia Tech.
Diversification Opportunities for Hanesbrands and Asia Tech
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanesbrands and Asia is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Asia Tech Image in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Tech Image 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 Asia Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Tech Image has no effect on the direction of Hanesbrands i.e., Hanesbrands and Asia Tech go up and down completely randomly.
Pair Corralation between Hanesbrands and Asia Tech
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.25 times more return on investment than Asia Tech. However, Hanesbrands is 1.25 times more volatile than Asia Tech Image. It trades about 0.14 of its potential returns per unit of risk. Asia Tech Image is currently generating about -0.11 per unit of risk. If you would invest 790.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 51.00 from holding Hanesbrands or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hanesbrands vs. Asia Tech Image
Performance |
| Timeline |
| Hanesbrands |
| Asia Tech Image |
Hanesbrands and Asia Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Asia Tech
The main advantage of trading using opposite Hanesbrands and Asia Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Asia Tech 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 Asia Tech will offset losses from the drop in Asia Tech's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Asia Tech vs. ANJI Technology Co | Asia Tech vs. Emerging Display Technologies | Asia Tech vs. U Tech Media Corp | Asia Tech vs. Ruentex Development Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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