Correlation Between Hanesbrands and World Copper
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and World Copper 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 World Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and World Copper, you can compare the effects of market volatilities on Hanesbrands and World Copper 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 World Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and World Copper.
Diversification Opportunities for Hanesbrands and World Copper
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hanesbrands and World is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and World Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Copper 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 World Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Copper has no effect on the direction of Hanesbrands i.e., Hanesbrands and World Copper go up and down completely randomly.
Pair Corralation between Hanesbrands and World Copper
Considering the 90-day investment horizon Hanesbrands is expected to generate 0.49 times more return on investment than World Copper. However, Hanesbrands is 2.05 times less risky than World Copper. It trades about 0.13 of its potential returns per unit of risk. World Copper is currently generating about -0.1 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. World Copper
Performance |
| Timeline |
| Hanesbrands |
| World Copper |
Hanesbrands and World Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and World Copper
The main advantage of trading using opposite Hanesbrands and World Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, World Copper 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 World Copper will offset losses from the drop in World Copper's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| World Copper vs. Hot Chili Limited | World Copper vs. Three Valley Copper | World Copper vs. Los Andes Copper | World Copper vs. QC Copper and |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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