Correlation Between Hanesbrands and Western Asset
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Western 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Western Asset California, you can compare the effects of market volatilities on Hanesbrands and Western 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Western Asset.
Diversification Opportunities for Hanesbrands and Western Asset
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanesbrands and Western is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Western Asset California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset California 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset California has no effect on the direction of Hanesbrands i.e., Hanesbrands and Western Asset go up and down completely randomly.
Pair Corralation between Hanesbrands and Western Asset
Considering the 90-day investment horizon Hanesbrands is expected to generate 12.68 times more return on investment than Western Asset. However, Hanesbrands is 12.68 times more volatile than Western Asset California. It trades about 0.15 of its potential returns per unit of risk. Western Asset California is currently generating about 0.03 per unit of risk. If you would invest 640.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 201.00 from holding Hanesbrands or generate 31.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Western Asset California
Performance |
| Timeline |
| Hanesbrands |
| Western Asset California |
Hanesbrands and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Western Asset
The main advantage of trading using opposite Hanesbrands and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Western 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 Western Asset will offset losses from the drop in Western Asset's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Western Asset vs. Lord Abbett Convertible | Western Asset vs. Allianzgi Convertible Income | Western Asset vs. Gabelli Convertible And | Western Asset vs. Putnam Convertible Incm Gwth |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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