Correlation Between Hanesbrands and Herman Miller
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Herman Miller 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 Herman Miller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Herman Miller, you can compare the effects of market volatilities on Hanesbrands and Herman Miller 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 Herman Miller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Herman Miller.
Diversification Opportunities for Hanesbrands and Herman Miller
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Herman is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Herman Miller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herman Miller 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 Herman Miller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herman Miller has no effect on the direction of Hanesbrands i.e., Hanesbrands and Herman Miller go up and down completely randomly.
Pair Corralation between Hanesbrands and Herman Miller
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.3 times more return on investment than Herman Miller. However, Hanesbrands is 2.3 times more volatile than Herman Miller. It trades about 0.24 of its potential returns per unit of risk. Herman Miller is currently generating about 0.35 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 | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Hanesbrands vs. Herman Miller
Performance |
| Timeline |
| Hanesbrands |
| Herman Miller |
Hanesbrands and Herman Miller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Herman Miller
The main advantage of trading using opposite Hanesbrands and Herman Miller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Herman Miller 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 Herman Miller will offset losses from the drop in Herman Miller's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Herman Miller vs. SERI INDUSTRIAL EO | Herman Miller vs. Meiko Electronics Co | Herman Miller vs. GALENA MINING LTD | Herman Miller vs. Zijin Mining Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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