Correlation Between Hanesbrands and Peak Resources
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Peak Resources 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 Peak Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Peak Resources Limited, you can compare the effects of market volatilities on Hanesbrands and Peak Resources 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 Peak Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Peak Resources.
Diversification Opportunities for Hanesbrands and Peak Resources
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanesbrands and Peak is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Peak Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peak Resources 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 Peak Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peak Resources has no effect on the direction of Hanesbrands i.e., Hanesbrands and Peak Resources go up and down completely randomly.
Pair Corralation between Hanesbrands and Peak Resources
Considering the 90-day investment horizon Hanesbrands is expected to generate 0.43 times more return on investment than Peak Resources. However, Hanesbrands is 2.32 times less risky than Peak Resources. It trades about 0.15 of its potential returns per unit of risk. Peak Resources Limited is currently generating about -0.02 per unit of risk. If you would invest 448.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 422.00 from holding Hanesbrands or generate 94.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.69% |
| Values | Daily Returns |
Hanesbrands vs. Peak Resources Limited
Performance |
| Timeline |
| Hanesbrands |
| Peak Resources |
Hanesbrands and Peak Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Peak Resources
The main advantage of trading using opposite Hanesbrands and Peak Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Peak Resources 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 Peak Resources will offset losses from the drop in Peak Resources' long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Peak Resources vs. Peak Minerals Limited | Peak Resources vs. Anheuser Busch InBev SANV | Peak Resources vs. AALBERTS IND | Peak Resources vs. SECURITAS B |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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