Correlation Between Hanesbrands and Ishares Us
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Ishares Us 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 Ishares Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Ishares Long Credit, you can compare the effects of market volatilities on Hanesbrands and Ishares Us 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 Ishares Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Ishares Us.
Diversification Opportunities for Hanesbrands and Ishares Us
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanesbrands and Ishares is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Ishares Long Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Long Credit 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 Ishares Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Long Credit has no effect on the direction of Hanesbrands i.e., Hanesbrands and Ishares Us go up and down completely randomly.
Pair Corralation between Hanesbrands and Ishares Us
Considering the 90-day investment horizon Hanesbrands is expected to generate 4.49 times more return on investment than Ishares Us. However, Hanesbrands is 4.49 times more volatile than Ishares Long Credit. It trades about 0.1 of its potential returns per unit of risk. Ishares Long Credit is currently generating about 0.08 per unit of risk. If you would invest 392.00 in Hanesbrands on September 4, 2024 and sell it today you would earn a total of 499.00 from holding Hanesbrands or generate 127.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Hanesbrands vs. Ishares Long Credit
Performance |
| Timeline |
| Hanesbrands |
| Ishares Long Credit |
Hanesbrands and Ishares Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Ishares Us
The main advantage of trading using opposite Hanesbrands and Ishares Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Ishares Us 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 Ishares Us will offset losses from the drop in Ishares Us' long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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