Correlation Between Hanesbrands and Green Brick
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Green Brick 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 Green Brick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Green Brick Partners, you can compare the effects of market volatilities on Hanesbrands and Green Brick 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 Green Brick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Green Brick.
Diversification Opportunities for Hanesbrands and Green Brick
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Green is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Green Brick Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Brick Partners 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 Green Brick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Brick Partners has no effect on the direction of Hanesbrands i.e., Hanesbrands and Green Brick go up and down completely randomly.
Pair Corralation between Hanesbrands and Green Brick
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.46 times more return on investment than Green Brick. However, Hanesbrands is 1.46 times more volatile than Green Brick Partners. It trades about 0.07 of its potential returns per unit of risk. Green Brick Partners is currently generating about 0.05 per unit of risk. If you would invest 460.00 in Hanesbrands on August 28, 2024 and sell it today you would earn a total of 385.00 from holding Hanesbrands or generate 83.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Green Brick Partners
Performance |
| Timeline |
| Hanesbrands |
| Green Brick Partners |
Hanesbrands and Green Brick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Green Brick
The main advantage of trading using opposite Hanesbrands and Green Brick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Green Brick 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 Green Brick will offset losses from the drop in Green Brick's long position.| Hanesbrands vs. VF Corporation | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour A | Hanesbrands vs. Oxford Industries |
| Green Brick vs. Taylor Morn Home | Green Brick vs. Century Communities | Green Brick vs. Beazer Homes USA | Green Brick vs. Meritage |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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