Correlation Between Hanesbrands and CIMB SP
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and CIMB SP 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 CIMB SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and CIMB SP Ethical, you can compare the effects of market volatilities on Hanesbrands and CIMB SP 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 CIMB SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and CIMB SP.
Diversification Opportunities for Hanesbrands and CIMB SP
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanesbrands and CIMB is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and CIMB SP Ethical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMB SP Ethical 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 CIMB SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMB SP Ethical has no effect on the direction of Hanesbrands i.e., Hanesbrands and CIMB SP go up and down completely randomly.
Pair Corralation between Hanesbrands and CIMB SP
Considering the 90-day investment horizon Hanesbrands is expected to generate 3.58 times more return on investment than CIMB SP. However, Hanesbrands is 3.58 times more volatile than CIMB SP Ethical. It trades about 0.06 of its potential returns per unit of risk. CIMB SP Ethical is currently generating about 0.12 per unit of risk. If you would invest 472.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 369.00 from holding Hanesbrands or generate 78.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.05% |
| Values | Daily Returns |
Hanesbrands vs. CIMB SP Ethical
Performance |
| Timeline |
| Hanesbrands |
| CIMB SP Ethical |
Hanesbrands and CIMB SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and CIMB SP
The main advantage of trading using opposite Hanesbrands and CIMB SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, CIMB SP 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 CIMB SP will offset losses from the drop in CIMB SP's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| CIMB SP vs. iShares Govt Bond | CIMB SP vs. Amundi MSCI Europe | CIMB SP vs. iShares Global AAA AA | CIMB SP vs. iShares Smart City |
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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