Correlation Between Hanesbrands and PT United
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and PT United 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 PT United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and PT United Tractors, you can compare the effects of market volatilities on Hanesbrands and PT United 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 PT United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and PT United.
Diversification Opportunities for Hanesbrands and PT United
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanesbrands and UTY is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and PT United Tractors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT United Tractors 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 PT United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT United Tractors has no effect on the direction of Hanesbrands i.e., Hanesbrands and PT United go up and down completely randomly.
Pair Corralation between Hanesbrands and PT United
Considering the 90-day investment horizon Hanesbrands is expected to generate 0.95 times more return on investment than PT United. However, Hanesbrands is 1.05 times less risky than PT United. It trades about 0.1 of its potential returns per unit of risk. PT United Tractors is currently generating about 0.06 per unit of risk. If you would invest 400.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 441.00 from holding Hanesbrands or generate 110.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Hanesbrands vs. PT United Tractors
Performance |
| Timeline |
| Hanesbrands |
| PT United Tractors |
Hanesbrands and PT United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and PT United
The main advantage of trading using opposite Hanesbrands and PT United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, PT United 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 PT United will offset losses from the drop in PT United's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| PT United vs. MACOM Technology Solutions | PT United vs. Computer And Technologies | PT United vs. SMA Solar Technology | PT United vs. DXC Technology Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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