Correlation Between Hanesbrands and Adacel Tech
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Adacel 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 Adacel Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Adacel Tech, you can compare the effects of market volatilities on Hanesbrands and Adacel 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 Adacel Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Adacel Tech.
Diversification Opportunities for Hanesbrands and Adacel Tech
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Adacel is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Adacel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adacel Tech 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 Adacel Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adacel Tech has no effect on the direction of Hanesbrands i.e., Hanesbrands and Adacel Tech go up and down completely randomly.
Pair Corralation between Hanesbrands and Adacel Tech
Considering the 90-day investment horizon Hanesbrands is expected to generate 0.95 times more return on investment than Adacel Tech. However, Hanesbrands is 1.05 times less risky than Adacel Tech. It trades about 0.04 of its potential returns per unit of risk. Adacel Tech is currently generating about -0.01 per unit of risk. If you would invest 610.00 in Hanesbrands on September 13, 2024 and sell it today you would earn a total of 231.00 from holding Hanesbrands or generate 37.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Hanesbrands vs. Adacel Tech
Performance |
| Timeline |
| Hanesbrands |
| Adacel Tech |
Hanesbrands and Adacel Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Adacel Tech
The main advantage of trading using opposite Hanesbrands and Adacel Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Adacel 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 Adacel Tech will offset losses from the drop in Adacel Tech's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Adacel Tech vs. Audio Pixels Holdings | Adacel Tech vs. Iodm | Adacel Tech vs. Nsx | Adacel Tech vs. TTG Fintech |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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