Correlation Between Hanesbrands and General Environmental
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and General Environmental 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 General Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and General Environmental Conservation, you can compare the effects of market volatilities on Hanesbrands and General Environmental 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 General Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and General Environmental.
Diversification Opportunities for Hanesbrands and General Environmental
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanesbrands and General is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and General Environmental Conserva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Environmental 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 General Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Environmental has no effect on the direction of Hanesbrands i.e., Hanesbrands and General Environmental go up and down completely randomly.
Pair Corralation between Hanesbrands and General Environmental
Considering the 90-day investment horizon Hanesbrands is expected to generate 12.93 times less return on investment than General Environmental. But when comparing it to its historical volatility, Hanesbrands is 12.73 times less risky than General Environmental. It trades about 0.04 of its potential returns per unit of risk. General Environmental Conservation is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 60.00 in General Environmental Conservation on September 5, 2024 and sell it today you would lose (12.00) from holding General Environmental Conservation or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Hanesbrands vs. General Environmental Conserva
Performance |
| Timeline |
| Hanesbrands |
| General Environmental |
Hanesbrands and General Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and General Environmental
The main advantage of trading using opposite Hanesbrands and General Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, General Environmental 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 General Environmental will offset losses from the drop in General Environmental's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| General Environmental vs. Asia Aviation Public | General Environmental vs. Bangkok Dusit Medical | General Environmental vs. Bangkok Expressway and | General Environmental vs. Airports of Thailand |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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