Correlation Between Hanesbrands and Publicis Groupe
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Publicis Groupe 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 Publicis Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Publicis Groupe SA, you can compare the effects of market volatilities on Hanesbrands and Publicis Groupe 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 Publicis Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Publicis Groupe.
Diversification Opportunities for Hanesbrands and Publicis Groupe
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanesbrands and Publicis is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Publicis Groupe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Publicis Groupe SA 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 Publicis Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Publicis Groupe SA has no effect on the direction of Hanesbrands i.e., Hanesbrands and Publicis Groupe go up and down completely randomly.
Pair Corralation between Hanesbrands and Publicis Groupe
If you would invest 790.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 51.00 from holding Hanesbrands or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Hanesbrands vs. Publicis Groupe SA
Performance |
| Timeline |
| Hanesbrands |
| Publicis Groupe SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hanesbrands and Publicis Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Publicis Groupe
The main advantage of trading using opposite Hanesbrands and Publicis Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Publicis Groupe 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 Publicis Groupe will offset losses from the drop in Publicis Groupe'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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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