Correlation Between Hanesbrands and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Sterling Capital 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 Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Sterling Capital Intermediate, you can compare the effects of market volatilities on Hanesbrands and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Sterling Capital.
Diversification Opportunities for Hanesbrands and Sterling Capital
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanesbrands and Sterling is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Sterling Capital Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Int 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Int has no effect on the direction of Hanesbrands i.e., Hanesbrands and Sterling Capital go up and down completely randomly.
Pair Corralation between Hanesbrands and Sterling Capital
Considering the 90-day investment horizon Hanesbrands is expected to generate 18.26 times more return on investment than Sterling Capital. However, Hanesbrands is 18.26 times more volatile than Sterling Capital Intermediate. It trades about 0.26 of its potential returns per unit of risk. Sterling Capital Intermediate is currently generating about 0.14 per unit of risk. If you would invest 712.00 in Hanesbrands on September 4, 2024 and sell it today you would earn a total of 179.00 from holding Hanesbrands or generate 25.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hanesbrands vs. Sterling Capital Intermediate
Performance |
| Timeline |
| Hanesbrands |
| Sterling Capital Int |
Hanesbrands and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Sterling Capital
The main advantage of trading using opposite Hanesbrands and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Sterling Capital vs. Oppenheimer Gold Special | Sterling Capital vs. Invesco Gold Special | Sterling Capital vs. Global Gold Fund | Sterling Capital vs. Gamco Global Gold |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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