Correlation Between Hanesbrands and Adventure Box
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Adventure Box 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 Adventure Box into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Adventure Box Technology, you can compare the effects of market volatilities on Hanesbrands and Adventure Box 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 Adventure Box. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Adventure Box.
Diversification Opportunities for Hanesbrands and Adventure Box
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanesbrands and Adventure is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Adventure Box Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adventure Box Technology 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 Adventure Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adventure Box Technology has no effect on the direction of Hanesbrands i.e., Hanesbrands and Adventure Box go up and down completely randomly.
Pair Corralation between Hanesbrands and Adventure Box
Considering the 90-day investment horizon Hanesbrands is expected to generate 3.33 times less return on investment than Adventure Box. But when comparing it to its historical volatility, Hanesbrands is 5.97 times less risky than Adventure Box. It trades about 0.1 of its potential returns per unit of risk. Adventure Box Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Adventure Box Technology on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Adventure Box Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.26% |
| Values | Daily Returns |
Hanesbrands vs. Adventure Box Technology
Performance |
| Timeline |
| Hanesbrands |
| Adventure Box Technology |
Hanesbrands and Adventure Box Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Adventure Box
The main advantage of trading using opposite Hanesbrands and Adventure Box positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Adventure Box 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 Adventure Box will offset losses from the drop in Adventure Box's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Adventure Box vs. Idogen AB | Adventure Box vs. Clean Motion AB | Adventure Box vs. Arion banki hf | Adventure Box vs. KABE Group AB |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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