Correlation Between Hanesbrands and Select International
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Select International 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 Select International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Select International Equity, you can compare the effects of market volatilities on Hanesbrands and Select International 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 Select International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Select International.
Diversification Opportunities for Hanesbrands and Select International
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Select is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Select International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select International 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 Select International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select International has no effect on the direction of Hanesbrands i.e., Hanesbrands and Select International go up and down completely randomly.
Pair Corralation between Hanesbrands and Select International
Considering the 90-day investment horizon Hanesbrands is expected to under-perform the Select International. In addition to that, Hanesbrands is 3.46 times more volatile than Select International Equity. It trades about -0.05 of its total potential returns per unit of risk. Select International Equity is currently generating about 0.0 per unit of volatility. If you would invest 1,047 in Select International Equity on January 14, 2025 and sell it today you would lose (14.00) from holding Select International Equity or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Hanesbrands vs. Select International Equity
Performance |
| Timeline |
| Hanesbrands |
| Select International |
Hanesbrands and Select International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Select International
The main advantage of trading using opposite Hanesbrands and Select International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Select International 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 Select International will offset losses from the drop in Select International's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Select International vs. International Developed Markets | Select International vs. Global Real Estate | Select International vs. Global Real Estate | Select International vs. Global Real Estate |
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.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Correlations Find global opportunities by holding instruments from different markets |