Correlation Between Hanesbrands and Columbia Thermostat
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Columbia Thermostat 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 Thermostat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Columbia Thermostat Fund, you can compare the effects of market volatilities on Hanesbrands and Columbia Thermostat 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 Thermostat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Columbia Thermostat.
Diversification Opportunities for Hanesbrands and Columbia Thermostat
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanesbrands and Columbia is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Columbia Thermostat Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Thermostat 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 Thermostat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Thermostat has no effect on the direction of Hanesbrands i.e., Hanesbrands and Columbia Thermostat go up and down completely randomly.
Pair Corralation between Hanesbrands and Columbia Thermostat
Considering the 90-day investment horizon Hanesbrands is expected to generate 8.81 times more return on investment than Columbia Thermostat. However, Hanesbrands is 8.81 times more volatile than Columbia Thermostat Fund. It trades about 0.11 of its potential returns per unit of risk. Columbia Thermostat Fund is currently generating about 0.14 per unit of risk. If you would invest 387.00 in Hanesbrands on September 4, 2024 and sell it today you would earn a total of 480.00 from holding Hanesbrands or generate 124.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Columbia Thermostat Fund
Performance |
| Timeline |
| Hanesbrands |
| Columbia Thermostat |
Hanesbrands and Columbia Thermostat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Columbia Thermostat
The main advantage of trading using opposite Hanesbrands and Columbia Thermostat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Columbia Thermostat 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 Thermostat will offset losses from the drop in Columbia Thermostat's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Columbia Thermostat vs. Columbia Thermostat Fund | Columbia Thermostat vs. Columbia Thermostat Fund | Columbia Thermostat vs. Columbia Income Builder | Columbia Thermostat vs. Columbia Income Builder |
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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