Correlation Between Hanesbrands and Fidelity Series
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Fidelity Series 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 Fidelity Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Fidelity Series Blue, you can compare the effects of market volatilities on Hanesbrands and Fidelity Series 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 Fidelity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Fidelity Series.
Diversification Opportunities for Hanesbrands and Fidelity Series
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanesbrands and FIDELITY is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Fidelity Series Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Series Blue 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 Fidelity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Series Blue has no effect on the direction of Hanesbrands i.e., Hanesbrands and Fidelity Series go up and down completely randomly.
Pair Corralation between Hanesbrands and Fidelity Series
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.7 times more return on investment than Fidelity Series. However, Hanesbrands is 2.7 times more volatile than Fidelity Series Blue. It trades about 0.13 of its potential returns per unit of risk. Fidelity Series Blue is currently generating about 0.09 per unit of risk. If you would invest 518.00 in Hanesbrands on September 5, 2024 and sell it today you would earn a total of 349.00 from holding Hanesbrands or generate 67.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Fidelity Series Blue
Performance |
| Timeline |
| Hanesbrands |
| Fidelity Series Blue |
Hanesbrands and Fidelity Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Fidelity Series
The main advantage of trading using opposite Hanesbrands and Fidelity Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Fidelity Series 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 Fidelity Series will offset losses from the drop in Fidelity Series' long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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