Correlation Between Hanesbrands and Service Properties
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Service Properties 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 Service Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Service Properties Trust, you can compare the effects of market volatilities on Hanesbrands and Service Properties 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 Service Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Service Properties.
Diversification Opportunities for Hanesbrands and Service Properties
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanesbrands and Service is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Service Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service Properties Trust 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 Service Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service Properties Trust has no effect on the direction of Hanesbrands i.e., Hanesbrands and Service Properties go up and down completely randomly.
Pair Corralation between Hanesbrands and Service Properties
Considering the 90-day investment horizon Hanesbrands is expected to generate 0.8 times more return on investment than Service Properties. However, Hanesbrands is 1.25 times less risky than Service Properties. It trades about 0.21 of its potential returns per unit of risk. Service Properties Trust is currently generating about 0.0 per unit of risk. If you would invest 712.00 in Hanesbrands on September 5, 2024 and sell it today you would earn a total of 146.00 from holding Hanesbrands or generate 20.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Service Properties Trust
Performance |
| Timeline |
| Hanesbrands |
| Service Properties Trust |
Hanesbrands and Service Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Service Properties
The main advantage of trading using opposite Hanesbrands and Service Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Service Properties 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 Service Properties will offset losses from the drop in Service Properties' long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Service Properties vs. Host Hotels Resorts | Service Properties vs. Ryman Hospitality Properties | Service Properties vs. Park Hotels Resorts | Service Properties vs. Pebblebrook Hotel Trust |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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