Correlation Between Hanesbrands and Agora SA
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Agora SA 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 Agora SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Agora SA, you can compare the effects of market volatilities on Hanesbrands and Agora SA 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 Agora SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Agora SA.
Diversification Opportunities for Hanesbrands and Agora SA
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanesbrands and Agora is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Agora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agora SA 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 Agora SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agora SA has no effect on the direction of Hanesbrands i.e., Hanesbrands and Agora SA go up and down completely randomly.
Pair Corralation between Hanesbrands and Agora SA
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.13 times less return on investment than Agora SA. In addition to that, Hanesbrands is 1.67 times more volatile than Agora SA. It trades about 0.04 of its total potential returns per unit of risk. Agora SA is currently generating about 0.07 per unit of volatility. If you would invest 473.00 in Agora SA on September 3, 2024 and sell it today you would earn a total of 397.00 from holding Agora SA or generate 83.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Agora SA
Performance |
| Timeline |
| Hanesbrands |
| Agora SA |
Hanesbrands and Agora SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Agora SA
The main advantage of trading using opposite Hanesbrands and Agora SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Agora SA 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 Agora SA will offset losses from the drop in Agora SA's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Agora SA vs. Banco Santander SA | Agora SA vs. UniCredit SpA | Agora SA vs. CEZ as | Agora SA vs. Polski Koncern Naftowy |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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