Correlation Between Hanesbrands and Grupo Posadas

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Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Grupo Posadas 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 Grupo Posadas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Grupo Posadas SAB, you can compare the effects of market volatilities on Hanesbrands and Grupo Posadas 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 Grupo Posadas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Grupo Posadas.

Diversification Opportunities for Hanesbrands and Grupo Posadas

-0.89
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Hanesbrands and Grupo is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Grupo Posadas SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Posadas SAB 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 Grupo Posadas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Posadas SAB has no effect on the direction of Hanesbrands i.e., Hanesbrands and Grupo Posadas go up and down completely randomly.

Pair Corralation between Hanesbrands and Grupo Posadas

Considering the 90-day investment horizon Hanesbrands is expected to generate 3.19 times more return on investment than Grupo Posadas. However, Hanesbrands is 3.19 times more volatile than Grupo Posadas SAB. It trades about 0.04 of its potential returns per unit of risk. Grupo Posadas SAB is currently generating about -0.02 per unit of risk. If you would invest  610.00  in Hanesbrands on September 13, 2024 and sell it today you would earn a total of  231.00  from holding Hanesbrands or generate 37.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy99.6%
ValuesDaily Returns

Hanesbrands  vs.  Grupo Posadas SAB

 Performance 
       Timeline  
Hanesbrands 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Hanesbrands demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Grupo Posadas SAB 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupo Posadas SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Hanesbrands and Grupo Posadas Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hanesbrands and Grupo Posadas

The main advantage of trading using opposite Hanesbrands and Grupo Posadas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Grupo Posadas 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 Grupo Posadas will offset losses from the drop in Grupo Posadas' long position.
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The idea behind Hanesbrands and Grupo Posadas SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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