Correlation Between Hanesbrands and Columbia Emerging
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Columbia Emerging 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 Columbia Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Columbia Emerging Markets, you can compare the effects of market volatilities on Hanesbrands and Columbia Emerging 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 Columbia Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Columbia Emerging.
Diversification Opportunities for Hanesbrands and Columbia Emerging
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanesbrands and Columbia is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Columbia Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Emerging Markets 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 Columbia Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Emerging Markets has no effect on the direction of Hanesbrands i.e., Hanesbrands and Columbia Emerging go up and down completely randomly.
Pair Corralation between Hanesbrands and Columbia Emerging
Considering the 90-day investment horizon Hanesbrands is expected to generate 5.3 times more return on investment than Columbia Emerging. However, Hanesbrands is 5.3 times more volatile than Columbia Emerging Markets. It trades about 0.26 of its potential returns per unit of risk. Columbia Emerging Markets 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Columbia Emerging Markets
Performance |
| Timeline |
| Hanesbrands |
| Columbia Emerging Markets |
Hanesbrands and Columbia Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Columbia Emerging
The main advantage of trading using opposite Hanesbrands and Columbia Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Columbia Emerging 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 Columbia Emerging will offset losses from the drop in Columbia Emerging's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Columbia Emerging vs. Columbia Porate Income | Columbia Emerging vs. Columbia Ultra Short | Columbia Emerging vs. Columbia Ultra Short | Columbia Emerging vs. Columbia Treasury Index |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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