Correlation Between Hanesbrands and Birkenstock Holding
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Birkenstock Holding 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 Birkenstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Birkenstock Holding plc, you can compare the effects of market volatilities on Hanesbrands and Birkenstock Holding 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 Birkenstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Birkenstock Holding.
Diversification Opportunities for Hanesbrands and Birkenstock Holding
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanesbrands and Birkenstock is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Birkenstock Holding plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birkenstock Holding plc 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 Birkenstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birkenstock Holding plc has no effect on the direction of Hanesbrands i.e., Hanesbrands and Birkenstock Holding go up and down completely randomly.
Pair Corralation between Hanesbrands and Birkenstock Holding
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.29 times more return on investment than Birkenstock Holding. However, Hanesbrands is 1.29 times more volatile than Birkenstock Holding plc. It trades about 0.07 of its potential returns per unit of risk. Birkenstock Holding plc is currently generating about 0.03 per unit of risk. If you would invest 463.00 in Hanesbrands on August 31, 2024 and sell it today you would earn a total of 407.00 from holding Hanesbrands or generate 87.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Hanesbrands vs. Birkenstock Holding plc
Performance |
| Timeline |
| Hanesbrands |
| Birkenstock Holding plc |
Hanesbrands and Birkenstock Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Birkenstock Holding
The main advantage of trading using opposite Hanesbrands and Birkenstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Birkenstock Holding 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 Birkenstock Holding will offset losses from the drop in Birkenstock Holding's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Birkenstock Holding vs. Emerson Radio | Birkenstock Holding vs. Sea | Birkenstock Holding vs. Brunswick | Birkenstock Holding vs. Kite Realty Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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