Correlation Between Hanesbrands and Franklin Strategic
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Franklin Strategic 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 Franklin Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Franklin Strategic Series, you can compare the effects of market volatilities on Hanesbrands and Franklin Strategic 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 Franklin Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Franklin Strategic.
Diversification Opportunities for Hanesbrands and Franklin Strategic
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hanesbrands and Franklin is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Franklin Strategic Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Strategic Series 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 Franklin Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Strategic Series has no effect on the direction of Hanesbrands i.e., Hanesbrands and Franklin Strategic go up and down completely randomly.
Pair Corralation between Hanesbrands and Franklin Strategic
Considering the 90-day investment horizon Hanesbrands is expected to generate 24.19 times more return on investment than Franklin Strategic. However, Hanesbrands is 24.19 times more volatile than Franklin Strategic Series. It trades about 0.22 of its potential returns per unit of risk. Franklin Strategic Series is currently generating about -0.03 per unit of risk. If you would invest 712.00 in Hanesbrands on September 5, 2024 and sell it today you would earn a total of 155.00 from holding Hanesbrands or generate 21.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Franklin Strategic Series
Performance |
| Timeline |
| Hanesbrands |
| Franklin Strategic Series |
Hanesbrands and Franklin Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Franklin Strategic
The main advantage of trading using opposite Hanesbrands and Franklin Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Franklin Strategic 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 Franklin Strategic will offset losses from the drop in Franklin Strategic's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Franklin Strategic vs. Franklin Mutual Beacon | Franklin Strategic vs. Templeton Developing Markets | Franklin Strategic vs. Franklin Mutual Global | Franklin Strategic vs. Franklin Mutual 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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