Correlation Between Hanesbrands and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Strategic Asset 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 Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Strategic Asset Management, you can compare the effects of market volatilities on Hanesbrands and Strategic Asset 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 Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Strategic Asset.
Diversification Opportunities for Hanesbrands and Strategic Asset
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanesbrands and Strategic is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana 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 Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Hanesbrands i.e., Hanesbrands and Strategic Asset go up and down completely randomly.
Pair Corralation between Hanesbrands and Strategic Asset
Considering the 90-day investment horizon Hanesbrands is expected to generate 9.84 times more return on investment than Strategic Asset. However, Hanesbrands is 9.84 times more volatile than Strategic Asset Management. It trades about 0.13 of its potential returns per unit of risk. Strategic Asset Management is currently generating about 0.15 per unit of risk. If you would invest 530.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 340.00 from holding Hanesbrands or generate 64.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Strategic Asset Management
Performance |
| Timeline |
| Hanesbrands |
| Strategic Asset Mana |
Hanesbrands and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Strategic Asset
The main advantage of trading using opposite Hanesbrands and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset'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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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