Correlation Between Hanesbrands and HLNLN

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Can any of the company-specific risk be diversified away by investing in both Hanesbrands and HLNLN 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 HLNLN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and HLNLN 3375 24 MAR 27, you can compare the effects of market volatilities on Hanesbrands and HLNLN 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 HLNLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and HLNLN.

Diversification Opportunities for Hanesbrands and HLNLN

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Hanesbrands and HLNLN is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and HLNLN 3375 24 MAR 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLNLN 3375 24 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 HLNLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLNLN 3375 24 has no effect on the direction of Hanesbrands i.e., Hanesbrands and HLNLN go up and down completely randomly.

Pair Corralation between Hanesbrands and HLNLN

Considering the 90-day investment horizon Hanesbrands is expected to generate 8.02 times more return on investment than HLNLN. However, Hanesbrands is 8.02 times more volatile than HLNLN 3375 24 MAR 27. It trades about 0.04 of its potential returns per unit of risk. HLNLN 3375 24 MAR 27 is currently generating about 0.01 per unit of risk. If you would invest  582.00  in Hanesbrands on November 2, 2024 and sell it today you would earn a total of  266.00  from holding Hanesbrands or generate 45.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy83.6%
ValuesDaily Returns

Hanesbrands  vs.  HLNLN 3375 24 MAR 27

 Performance 
       Timeline  
Hanesbrands 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Hanesbrands demonstrated solid returns over the last few months and may actually be approaching a breakup point.
HLNLN 3375 24 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HLNLN 3375 24 MAR 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HLNLN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hanesbrands and HLNLN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hanesbrands and HLNLN

The main advantage of trading using opposite Hanesbrands and HLNLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, HLNLN 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 HLNLN will offset losses from the drop in HLNLN's long position.
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The idea behind Hanesbrands and HLNLN 3375 24 MAR 27 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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