Correlation Between Hanesbrands and Lazard Developing
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Lazard Developing 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 Lazard Developing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Lazard Developing Markets, you can compare the effects of market volatilities on Hanesbrands and Lazard Developing 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 Lazard Developing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Lazard Developing.
Diversification Opportunities for Hanesbrands and Lazard Developing
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanesbrands and Lazard is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Lazard Developing Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Developing Markets 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 Lazard Developing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Developing Markets has no effect on the direction of Hanesbrands i.e., Hanesbrands and Lazard Developing go up and down completely randomly.
Pair Corralation between Hanesbrands and Lazard Developing
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.99 times more return on investment than Lazard Developing. However, Hanesbrands is 2.99 times more volatile than Lazard Developing Markets. It trades about 0.2 of its potential returns per unit of risk. Lazard Developing Markets is currently generating about -0.08 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 76.00 from holding Hanesbrands or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Lazard Developing Markets
Performance |
| Timeline |
| Hanesbrands |
| Lazard Developing Markets |
Hanesbrands and Lazard Developing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Lazard Developing
The main advantage of trading using opposite Hanesbrands and Lazard Developing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Lazard Developing 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 Lazard Developing will offset losses from the drop in Lazard Developing'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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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