Correlation Between Hanesbrands and Charwood Energy
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Charwood Energy 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 Charwood Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Charwood Energy SA, you can compare the effects of market volatilities on Hanesbrands and Charwood Energy 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 Charwood Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Charwood Energy.
Diversification Opportunities for Hanesbrands and Charwood Energy
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanesbrands and Charwood is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Charwood Energy SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charwood Energy 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 Charwood Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charwood Energy SA has no effect on the direction of Hanesbrands i.e., Hanesbrands and Charwood Energy go up and down completely randomly.
Pair Corralation between Hanesbrands and Charwood Energy
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.41 times more return on investment than Charwood Energy. However, Hanesbrands is 1.41 times more volatile than Charwood Energy SA. It trades about 0.17 of its potential returns per unit of risk. Charwood Energy SA is currently generating about 0.03 per unit of risk. If you would invest 634.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 236.00 from holding Hanesbrands or generate 37.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Hanesbrands vs. Charwood Energy SA
Performance |
| Timeline |
| Hanesbrands |
| Charwood Energy SA |
Hanesbrands and Charwood Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Charwood Energy
The main advantage of trading using opposite Hanesbrands and Charwood Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Charwood Energy 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 Charwood Energy will offset losses from the drop in Charwood Energy's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Charwood Energy vs. Linedata Services SA | Charwood Energy vs. ZCCM Investments Holdings | Charwood Energy vs. Bilendi | Charwood Energy vs. DONTNOD Entertainment SA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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