Correlation Between Hanesbrands and Dimensional Global
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Dimensional Global 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 Dimensional Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Dimensional Global Core, you can compare the effects of market volatilities on Hanesbrands and Dimensional Global 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 Dimensional Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Dimensional Global.
Diversification Opportunities for Hanesbrands and Dimensional Global
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanesbrands and Dimensional is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Dimensional Global Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Global Core 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 Dimensional Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Global Core has no effect on the direction of Hanesbrands i.e., Hanesbrands and Dimensional Global go up and down completely randomly.
Pair Corralation between Hanesbrands and Dimensional Global
Considering the 90-day investment horizon Hanesbrands is expected to generate 5.28 times more return on investment than Dimensional Global. However, Hanesbrands is 5.28 times more volatile than Dimensional Global Core. It trades about 0.11 of its potential returns per unit of risk. Dimensional Global Core 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 | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Hanesbrands vs. Dimensional Global Core
Performance |
| Timeline |
| Hanesbrands |
| Dimensional Global Core |
Hanesbrands and Dimensional Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Dimensional Global
The main advantage of trading using opposite Hanesbrands and Dimensional Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Dimensional Global 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 Dimensional Global will offset losses from the drop in Dimensional Global's 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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