Correlation Between Hanesbrands and Resqunit
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Resqunit 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 Resqunit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Resqunit AB, you can compare the effects of market volatilities on Hanesbrands and Resqunit 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 Resqunit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Resqunit.
Diversification Opportunities for Hanesbrands and Resqunit
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanesbrands and Resqunit is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Resqunit AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resqunit AB 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 Resqunit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resqunit AB has no effect on the direction of Hanesbrands i.e., Hanesbrands and Resqunit go up and down completely randomly.
Pair Corralation between Hanesbrands and Resqunit
Considering the 90-day investment horizon Hanesbrands is expected to generate 5.66 times less return on investment than Resqunit. But when comparing it to its historical volatility, Hanesbrands is 5.42 times less risky than Resqunit. It trades about 0.04 of its potential returns per unit of risk. Resqunit AB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 447.00 in Resqunit AB on September 4, 2024 and sell it today you would lose (427.00) from holding Resqunit AB or give up 95.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Hanesbrands vs. Resqunit AB
Performance |
| Timeline |
| Hanesbrands |
| Resqunit AB |
Hanesbrands and Resqunit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Resqunit
The main advantage of trading using opposite Hanesbrands and Resqunit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Resqunit 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 Resqunit will offset losses from the drop in Resqunit's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Resqunit vs. ZAZZ Energy of | Resqunit vs. Triboron International AB | Resqunit vs. NCAB Group | Resqunit vs. Vimian Group AB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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