Correlation Between Hanesbrands and Southern Cross
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Southern Cross 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 Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Southern Cross Gold, you can compare the effects of market volatilities on Hanesbrands and Southern Cross 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 Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Southern Cross.
Diversification Opportunities for Hanesbrands and Southern Cross
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanesbrands and Southern is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Southern Cross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Gold 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 Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Gold has no effect on the direction of Hanesbrands i.e., Hanesbrands and Southern Cross go up and down completely randomly.
Pair Corralation between Hanesbrands and Southern Cross
Considering the 90-day investment horizon Hanesbrands is expected to generate 0.74 times more return on investment than Southern Cross. However, Hanesbrands is 1.35 times less risky than Southern Cross. It trades about 0.13 of its potential returns per unit of risk. Southern Cross Gold is currently generating about 0.03 per unit of risk. If you would invest 530.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 340.00 from holding Hanesbrands or generate 64.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.66% |
| Values | Daily Returns |
Hanesbrands vs. Southern Cross Gold
Performance |
| Timeline |
| Hanesbrands |
| Southern Cross Gold |
Hanesbrands and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Southern Cross
The main advantage of trading using opposite Hanesbrands and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Southern Cross vs. Aspire Mining | Southern Cross vs. COAST ENTERTAINMENT HOLDINGS | Southern Cross vs. ABACUS STORAGE KING | Southern Cross vs. Andean Silver Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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