Correlation Between Hanesbrands and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Massmutual Select 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 Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Massmutual Select Small, you can compare the effects of market volatilities on Hanesbrands and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Massmutual Select.
Diversification Opportunities for Hanesbrands and Massmutual Select
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hanesbrands and MASSMUTUAL is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Massmutual Select Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Small 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Small has no effect on the direction of Hanesbrands i.e., Hanesbrands and Massmutual Select go up and down completely randomly.
Pair Corralation between Hanesbrands and Massmutual Select
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.62 times more return on investment than Massmutual Select. However, Hanesbrands is 2.62 times more volatile than Massmutual Select Small. It trades about 0.13 of its potential returns per unit of risk. Massmutual Select Small is currently generating about 0.1 per unit of risk. If you would invest 518.00 in Hanesbrands on September 5, 2024 and sell it today you would earn a total of 349.00 from holding Hanesbrands or generate 67.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Massmutual Select Small
Performance |
| Timeline |
| Hanesbrands |
| Massmutual Select Small |
Hanesbrands and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Massmutual Select
The main advantage of trading using opposite Hanesbrands and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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