Correlation Between Hanesbrands and Shoprite Holdings
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Shoprite Holdings 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 Shoprite Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Shoprite Holdings Ltd, you can compare the effects of market volatilities on Hanesbrands and Shoprite Holdings 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 Shoprite Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Shoprite Holdings.
Diversification Opportunities for Hanesbrands and Shoprite Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hanesbrands and Shoprite is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Shoprite Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoprite Holdings 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 Shoprite Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoprite Holdings has no effect on the direction of Hanesbrands i.e., Hanesbrands and Shoprite Holdings go up and down completely randomly.
Pair Corralation between Hanesbrands and Shoprite Holdings
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.71 times more return on investment than Shoprite Holdings. However, Hanesbrands is 1.71 times more volatile than Shoprite Holdings Ltd. It trades about 0.15 of its potential returns per unit of risk. Shoprite Holdings Ltd is currently generating about 0.07 per unit of risk. If you would invest 448.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 422.00 from holding Hanesbrands or generate 94.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Shoprite Holdings Ltd
Performance |
| Timeline |
| Hanesbrands |
| Shoprite Holdings |
Hanesbrands and Shoprite Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Shoprite Holdings
The main advantage of trading using opposite Hanesbrands and Shoprite Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Shoprite Holdings 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 Shoprite Holdings will offset losses from the drop in Shoprite Holdings' long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Shoprite Holdings vs. Sanlam Ltd PK | Shoprite Holdings vs. Vodacom Group Ltd | Shoprite Holdings vs. Woolworths Holdings Ltd | Shoprite Holdings vs. Standard Bank Group |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |