Correlation Between Hanesbrands and KION GROUP
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and KION GROUP 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 KION GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and KION GROUP AG, you can compare the effects of market volatilities on Hanesbrands and KION GROUP 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 KION GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and KION GROUP.
Diversification Opportunities for Hanesbrands and KION GROUP
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and KION is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and KION GROUP AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION GROUP AG 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 KION GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION GROUP AG has no effect on the direction of Hanesbrands i.e., Hanesbrands and KION GROUP go up and down completely randomly.
Pair Corralation between Hanesbrands and KION GROUP
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.02 times less return on investment than KION GROUP. But when comparing it to its historical volatility, Hanesbrands is 1.0 times less risky than KION GROUP. It trades about 0.04 of its potential returns per unit of risk. KION GROUP AG is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,665 in KION GROUP AG on September 4, 2024 and sell it today you would earn a total of 755.00 from holding KION GROUP AG or generate 28.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.03% |
| Values | Daily Returns |
Hanesbrands vs. KION GROUP AG
Performance |
| Timeline |
| Hanesbrands |
| KION GROUP AG |
Hanesbrands and KION GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and KION GROUP
The main advantage of trading using opposite Hanesbrands and KION GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, KION GROUP 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 KION GROUP will offset losses from the drop in KION GROUP's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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