Correlation Between Hanesbrands and Northern Lion
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Northern Lion 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 Northern Lion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Northern Lion Gold, you can compare the effects of market volatilities on Hanesbrands and Northern Lion 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 Northern Lion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Northern Lion.
Diversification Opportunities for Hanesbrands and Northern Lion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanesbrands and Northern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Northern Lion Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lion Gold 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 Northern Lion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lion Gold has no effect on the direction of Hanesbrands i.e., Hanesbrands and Northern Lion go up and down completely randomly.
Pair Corralation between Hanesbrands and Northern Lion
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.13 times more return on investment than Northern Lion. However, Hanesbrands is 2.13 times more volatile than Northern Lion Gold. It trades about 0.04 of its potential returns per unit of risk. Northern Lion Gold is currently generating about -0.04 per unit of risk. If you would invest 596.00 in Hanesbrands on September 5, 2024 and sell it today you would earn a total of 271.00 from holding Hanesbrands or generate 45.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hanesbrands vs. Northern Lion Gold
Performance |
| Timeline |
| Hanesbrands |
| Northern Lion Gold |
Hanesbrands and Northern Lion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Northern Lion
The main advantage of trading using opposite Hanesbrands and Northern Lion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Northern Lion 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 Northern Lion will offset losses from the drop in Northern Lion's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Northern Lion vs. Qubec Nickel Corp | Northern Lion vs. IGO Limited | Northern Lion vs. Avarone Metals | Northern Lion vs. Elcora Advanced Materials |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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