Correlation Between Hanesbrands and Ferronordic
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Ferronordic 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 Ferronordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Ferronordic AB, you can compare the effects of market volatilities on Hanesbrands and Ferronordic 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 Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Ferronordic.
Diversification Opportunities for Hanesbrands and Ferronordic
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Ferronordic is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic AB 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 Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of Hanesbrands i.e., Hanesbrands and Ferronordic go up and down completely randomly.
Pair Corralation between Hanesbrands and Ferronordic
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.06 times more return on investment than Ferronordic. However, Hanesbrands is 1.06 times more volatile than Ferronordic AB. It trades about 0.04 of its potential returns per unit of risk. Ferronordic AB is currently generating about 0.02 per unit of risk. If you would invest 629.00 in Hanesbrands on September 4, 2024 and sell it today you would earn a total of 262.00 from holding Hanesbrands or generate 41.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Hanesbrands vs. Ferronordic AB
Performance |
| Timeline |
| Hanesbrands |
| Ferronordic AB |
Hanesbrands and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Ferronordic
The main advantage of trading using opposite Hanesbrands and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Ferronordic 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 Ferronordic will offset losses from the drop in Ferronordic's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Ferronordic vs. JLT Mobile Computers | Ferronordic vs. White Pearl Technology | Ferronordic vs. Upsales Technology AB | Ferronordic vs. Beowulf Mining PLC |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |