Correlation Between Hanesbrands and Kubota
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Kubota 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 Kubota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Kubota, you can compare the effects of market volatilities on Hanesbrands and Kubota 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 Kubota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Kubota.
Diversification Opportunities for Hanesbrands and Kubota
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanesbrands and Kubota is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Kubota in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kubota 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 Kubota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kubota has no effect on the direction of Hanesbrands i.e., Hanesbrands and Kubota go up and down completely randomly.
Pair Corralation between Hanesbrands and Kubota
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.7 times more return on investment than Kubota. However, Hanesbrands is 2.7 times more volatile than Kubota. It trades about 0.24 of its potential returns per unit of risk. Kubota is currently generating about 0.0 per unit of risk. If you would invest 712.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 158.00 from holding Hanesbrands or generate 22.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hanesbrands vs. Kubota
Performance |
| Timeline |
| Hanesbrands |
| Kubota |
Hanesbrands and Kubota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Kubota
The main advantage of trading using opposite Hanesbrands and Kubota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Kubota 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 Kubota will offset losses from the drop in Kubota's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |