Correlation Between Hanesbrands and Bilfinger
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Bilfinger 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 Bilfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Bilfinger SE, you can compare the effects of market volatilities on Hanesbrands and Bilfinger 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 Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Bilfinger.
Diversification Opportunities for Hanesbrands and Bilfinger
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Bilfinger is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Bilfinger SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE 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 Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE has no effect on the direction of Hanesbrands i.e., Hanesbrands and Bilfinger go up and down completely randomly.
Pair Corralation between Hanesbrands and Bilfinger
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.15 times more return on investment than Bilfinger. However, Hanesbrands is 1.15 times more volatile than Bilfinger SE. It trades about 0.14 of its potential returns per unit of risk. Bilfinger SE is currently generating about 0.07 per unit of risk. If you would invest 790.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 51.00 from holding Hanesbrands or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hanesbrands vs. Bilfinger SE
Performance |
| Timeline |
| Hanesbrands |
| Bilfinger SE |
Hanesbrands and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Bilfinger
The main advantage of trading using opposite Hanesbrands and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Bilfinger vs. BOSTON BEER A | Bilfinger vs. United Breweries Co | Bilfinger vs. MagnaChip Semiconductor Corp | Bilfinger vs. Westinghouse Air Brake |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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