Correlation Between Hanesbrands and Agfa-Gevaert
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Agfa-Gevaert 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 Agfa-Gevaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Agfa Gevaert NV, you can compare the effects of market volatilities on Hanesbrands and Agfa-Gevaert 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 Agfa-Gevaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Agfa-Gevaert.
Diversification Opportunities for Hanesbrands and Agfa-Gevaert
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanesbrands and Agfa-Gevaert is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Agfa Gevaert NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agfa Gevaert NV 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 Agfa-Gevaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agfa Gevaert NV has no effect on the direction of Hanesbrands i.e., Hanesbrands and Agfa-Gevaert go up and down completely randomly.
Pair Corralation between Hanesbrands and Agfa-Gevaert
Considering the 90-day investment horizon Hanesbrands is expected to generate 0.62 times more return on investment than Agfa-Gevaert. However, Hanesbrands is 1.61 times less risky than Agfa-Gevaert. It trades about 0.18 of its potential returns per unit of risk. Agfa Gevaert NV is currently generating about -0.15 per unit of risk. If you would invest 645.00 in Hanesbrands on September 4, 2024 and sell it today you would earn a total of 246.00 from holding Hanesbrands or generate 38.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Agfa Gevaert NV
Performance |
| Timeline |
| Hanesbrands |
| Agfa Gevaert NV |
Hanesbrands and Agfa-Gevaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Agfa-Gevaert
The main advantage of trading using opposite Hanesbrands and Agfa-Gevaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Agfa-Gevaert 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 Agfa-Gevaert will offset losses from the drop in Agfa-Gevaert's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Agfa-Gevaert vs. Apple Inc | Agfa-Gevaert vs. Microsoft | Agfa-Gevaert vs. Amazon Inc | Agfa-Gevaert vs. Alphabet Inc Class C |
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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