Correlation Between Hanesbrands and Genus Plc
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Genus Plc 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 Genus Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Genus plc, you can compare the effects of market volatilities on Hanesbrands and Genus Plc 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 Genus Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Genus Plc.
Diversification Opportunities for Hanesbrands and Genus Plc
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanesbrands and Genus is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Genus plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genus plc 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 Genus Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genus plc has no effect on the direction of Hanesbrands i.e., Hanesbrands and Genus Plc go up and down completely randomly.
Pair Corralation between Hanesbrands and Genus Plc
Considering the 90-day investment horizon Hanesbrands is expected to generate 0.9 times more return on investment than Genus Plc. However, Hanesbrands is 1.11 times less risky than Genus Plc. It trades about 0.14 of its potential returns per unit of risk. Genus plc is currently generating about -0.24 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 | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hanesbrands vs. Genus plc
Performance |
| Timeline |
| Hanesbrands |
| Genus plc |
Hanesbrands and Genus Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Genus Plc
The main advantage of trading using opposite Hanesbrands and Genus Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Genus Plc 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 Genus Plc will offset losses from the drop in Genus Plc's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Genus Plc vs. Marfrig Global Foods | Genus Plc vs. Aldel Financial II | Genus Plc vs. Sandstorm Gold Ltd | Genus Plc vs. Enersys |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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