Correlation Between Hanesbrands and Obour Land
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Obour Land 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 Obour Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Obour Land For, you can compare the effects of market volatilities on Hanesbrands and Obour Land 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 Obour Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Obour Land.
Diversification Opportunities for Hanesbrands and Obour Land
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanesbrands and Obour is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Obour Land For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obour Land For 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 Obour Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obour Land For has no effect on the direction of Hanesbrands i.e., Hanesbrands and Obour Land go up and down completely randomly.
Pair Corralation between Hanesbrands and Obour Land
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.12 times less return on investment than Obour Land. In addition to that, Hanesbrands is 1.05 times more volatile than Obour Land For. It trades about 0.04 of its total potential returns per unit of risk. Obour Land For is currently generating about 0.08 per unit of volatility. If you would invest 757.00 in Obour Land For on September 12, 2024 and sell it today you would earn a total of 1,096 from holding Obour Land For or generate 144.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.98% |
| Values | Daily Returns |
Hanesbrands vs. Obour Land For
Performance |
| Timeline |
| Hanesbrands |
| Obour Land For |
Hanesbrands and Obour Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Obour Land
The main advantage of trading using opposite Hanesbrands and Obour Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Obour Land 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 Obour Land will offset losses from the drop in Obour Land's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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