Correlation Between Hanesbrands and Alpha HPA
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Alpha HPA 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 Alpha HPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Alpha HPA, you can compare the effects of market volatilities on Hanesbrands and Alpha HPA 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 Alpha HPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Alpha HPA.
Diversification Opportunities for Hanesbrands and Alpha HPA
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Alpha is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Alpha HPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha HPA 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 Alpha HPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha HPA has no effect on the direction of Hanesbrands i.e., Hanesbrands and Alpha HPA go up and down completely randomly.
Pair Corralation between Hanesbrands and Alpha HPA
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.8 times more return on investment than Alpha HPA. However, Hanesbrands is 1.8 times more volatile than Alpha HPA. It trades about 0.15 of its potential returns per unit of risk. Alpha HPA is currently generating about 0.05 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 | Insignificant |
| Accuracy | 96.92% |
| Values | Daily Returns |
Hanesbrands vs. Alpha HPA
Performance |
| Timeline |
| Hanesbrands |
| Alpha HPA |
Hanesbrands and Alpha HPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Alpha HPA
The main advantage of trading using opposite Hanesbrands and Alpha HPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Alpha HPA 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 Alpha HPA will offset losses from the drop in Alpha HPA'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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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