Correlation Between Hanesbrands and Duke Energy
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Duke Energy 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 Duke Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Duke Energy, you can compare the effects of market volatilities on Hanesbrands and Duke Energy 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 Duke Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Duke Energy.
Diversification Opportunities for Hanesbrands and Duke Energy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanesbrands and Duke is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Duke Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duke Energy 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 Duke Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duke Energy has no effect on the direction of Hanesbrands i.e., Hanesbrands and Duke Energy go up and down completely randomly.
Pair Corralation between Hanesbrands and Duke Energy
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.63 times more return on investment than Duke Energy. However, Hanesbrands is 1.63 times more volatile than Duke Energy. It trades about 0.26 of its potential returns per unit of risk. Duke Energy is currently generating about 0.16 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 | 85.71% |
| Values | Daily Returns |
Hanesbrands vs. Duke Energy
Performance |
| Timeline |
| Hanesbrands |
| Duke Energy |
Hanesbrands and Duke Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Duke Energy
The main advantage of trading using opposite Hanesbrands and Duke Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Duke Energy 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 Duke Energy will offset losses from the drop in Duke Energy's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Duke Energy vs. Unifique Telecomunicaes SA | Duke Energy vs. Global X Funds | Duke Energy vs. MAHLE Metal Leve | Duke Energy vs. Zoom Video Communications |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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