Correlation Between Hanesbrands and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Tsingtao Brewery 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 Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Tsingtao Brewery, you can compare the effects of market volatilities on Hanesbrands and Tsingtao Brewery 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 Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Tsingtao Brewery.
Diversification Opportunities for Hanesbrands and Tsingtao Brewery
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanesbrands and Tsingtao is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery 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 Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of Hanesbrands i.e., Hanesbrands and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between Hanesbrands and Tsingtao Brewery
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.03 times more return on investment than Tsingtao Brewery. However, Hanesbrands is 1.03 times more volatile than Tsingtao Brewery. It trades about 0.04 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.03 per unit of risk. If you would invest 637.00 in Hanesbrands on September 3, 2024 and sell it today you would earn a total of 233.00 from holding Hanesbrands or generate 36.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Hanesbrands vs. Tsingtao Brewery
Performance |
| Timeline |
| Hanesbrands |
| Tsingtao Brewery |
Hanesbrands and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Tsingtao Brewery
The main advantage of trading using opposite Hanesbrands and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Tsingtao Brewery 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 Tsingtao Brewery will offset losses from the drop in Tsingtao Brewery's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Tsingtao Brewery vs. Cars Inc | Tsingtao Brewery vs. Gladstone Investment | Tsingtao Brewery vs. Virtus Investment Partners | Tsingtao Brewery vs. HK Electric Investments |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |