Correlation Between Hanesbrands and DIH Holding
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and DIH Holding 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 DIH Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and DIH Holding US,, you can compare the effects of market volatilities on Hanesbrands and DIH Holding 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 DIH Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and DIH Holding.
Diversification Opportunities for Hanesbrands and DIH Holding
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hanesbrands and DIH is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and DIH Holding US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holding US, 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 DIH Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holding US, has no effect on the direction of Hanesbrands i.e., Hanesbrands and DIH Holding go up and down completely randomly.
Pair Corralation between Hanesbrands and DIH Holding
Considering the 90-day investment horizon Hanesbrands is expected to generate 16.4 times less return on investment than DIH Holding. But when comparing it to its historical volatility, Hanesbrands is 12.89 times less risky than DIH Holding. It trades about 0.14 of its potential returns per unit of risk. DIH Holding US, is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3.00 in DIH Holding US, on September 12, 2024 and sell it today you would earn a total of 1.89 from holding DIH Holding US, or generate 63.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. DIH Holding US,
Performance |
| Timeline |
| Hanesbrands |
| DIH Holding US, |
Hanesbrands and DIH Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and DIH Holding
The main advantage of trading using opposite Hanesbrands and DIH Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, DIH Holding 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 DIH Holding will offset losses from the drop in DIH Holding'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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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