Correlation Between Hanesbrands and Catholic Responsible
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Catholic Responsible 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 Catholic Responsible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Catholic Responsible Investments, you can compare the effects of market volatilities on Hanesbrands and Catholic Responsible 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 Catholic Responsible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Catholic Responsible.
Diversification Opportunities for Hanesbrands and Catholic Responsible
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Catholic is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Catholic Responsible Investmen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Responsible 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 Catholic Responsible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Responsible has no effect on the direction of Hanesbrands i.e., Hanesbrands and Catholic Responsible go up and down completely randomly.
Pair Corralation between Hanesbrands and Catholic Responsible
Considering the 90-day investment horizon Hanesbrands is expected to generate 21.61 times more return on investment than Catholic Responsible. However, Hanesbrands is 21.61 times more volatile than Catholic Responsible Investments. It trades about 0.13 of its potential returns per unit of risk. Catholic Responsible Investments is currently generating about 0.15 per unit of risk. If you would invest 499.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 342.00 from holding Hanesbrands or generate 68.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Hanesbrands vs. Catholic Responsible Investmen
Performance |
| Timeline |
| Hanesbrands |
| Catholic Responsible |
Hanesbrands and Catholic Responsible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Catholic Responsible
The main advantage of trading using opposite Hanesbrands and Catholic Responsible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Catholic Responsible 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 Catholic Responsible will offset losses from the drop in Catholic Responsible's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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