Correlation Between Hanesbrands and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Novo Nordisk 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 Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Novo Nordisk AS, you can compare the effects of market volatilities on Hanesbrands and Novo Nordisk 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 Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Novo Nordisk.
Diversification Opportunities for Hanesbrands and Novo Nordisk
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanesbrands and Novo is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Novo Nordisk AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novo Nordisk AS 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 Novo Nordisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novo Nordisk AS has no effect on the direction of Hanesbrands i.e., Hanesbrands and Novo Nordisk go up and down completely randomly.
Pair Corralation between Hanesbrands and Novo Nordisk
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.81 times more return on investment than Novo Nordisk. However, Hanesbrands is 1.81 times more volatile than Novo Nordisk AS. It trades about 0.11 of its potential returns per unit of risk. Novo Nordisk AS is currently generating about 0.04 per unit of risk. If you would invest 387.00 in Hanesbrands on September 4, 2024 and sell it today you would earn a total of 504.00 from holding Hanesbrands or generate 130.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Hanesbrands vs. Novo Nordisk AS
Performance |
| Timeline |
| Hanesbrands |
| Novo Nordisk AS |
Hanesbrands and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Novo Nordisk
The main advantage of trading using opposite Hanesbrands and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Novo Nordisk 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 Novo Nordisk will offset losses from the drop in Novo Nordisk's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Novo Nordisk vs. HYDROFARM HLD GRP | Novo Nordisk vs. Australian Agricultural | Novo Nordisk vs. Sumitomo Mitsui Construction | Novo Nordisk vs. TITAN MACHINERY |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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