Correlation Between Hanesbrands and Megapower Makmur
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Megapower Makmur 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 Megapower Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Megapower Makmur TBK, you can compare the effects of market volatilities on Hanesbrands and Megapower Makmur 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 Megapower Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Megapower Makmur.
Diversification Opportunities for Hanesbrands and Megapower Makmur
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanesbrands and Megapower is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Megapower Makmur TBK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megapower Makmur TBK 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 Megapower Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megapower Makmur TBK has no effect on the direction of Hanesbrands i.e., Hanesbrands and Megapower Makmur go up and down completely randomly.
Pair Corralation between Hanesbrands and Megapower Makmur
Considering the 90-day investment horizon Hanesbrands is expected to generate 0.67 times more return on investment than Megapower Makmur. However, Hanesbrands is 1.5 times less risky than Megapower Makmur. It trades about 0.14 of its potential returns per unit of risk. Megapower Makmur TBK is currently generating about -0.18 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 51.00 from holding Hanesbrands or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Megapower Makmur TBK
Performance |
| Timeline |
| Hanesbrands |
| Megapower Makmur TBK |
Hanesbrands and Megapower Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Megapower Makmur
The main advantage of trading using opposite Hanesbrands and Megapower Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Megapower Makmur 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 Megapower Makmur will offset losses from the drop in Megapower Makmur's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Megapower Makmur vs. Terregra Asia Energy | Megapower Makmur vs. Bali Towerindo Sentra | Megapower Makmur vs. Sanurhasta Mitra PT | Megapower Makmur vs. Kencana Energi Lestari |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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