Correlation Between Hanesbrands and SGI Dynamic
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and SGI Dynamic 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 SGI Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and SGI Dynamic Tactical, you can compare the effects of market volatilities on Hanesbrands and SGI Dynamic 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 SGI Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and SGI Dynamic.
Diversification Opportunities for Hanesbrands and SGI Dynamic
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanesbrands and SGI is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and SGI Dynamic Tactical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGI Dynamic Tactical 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 SGI Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGI Dynamic Tactical has no effect on the direction of Hanesbrands i.e., Hanesbrands and SGI Dynamic go up and down completely randomly.
Pair Corralation between Hanesbrands and SGI Dynamic
Considering the 90-day investment horizon Hanesbrands is expected to generate 5.76 times more return on investment than SGI Dynamic. However, Hanesbrands is 5.76 times more volatile than SGI Dynamic Tactical. It trades about 0.26 of its potential returns per unit of risk. SGI Dynamic Tactical is currently generating about 0.33 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 | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hanesbrands vs. SGI Dynamic Tactical
Performance |
| Timeline |
| Hanesbrands |
| SGI Dynamic Tactical |
Hanesbrands and SGI Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and SGI Dynamic
The main advantage of trading using opposite Hanesbrands and SGI Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, SGI Dynamic 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 SGI Dynamic will offset losses from the drop in SGI Dynamic's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| SGI Dynamic vs. iShares Core Aggressive | SGI Dynamic vs. Tidal Trust II | SGI Dynamic vs. SPDR SSgA Multi Asset | SGI Dynamic vs. SPDR SSgA Global |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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