Correlation Between Hanesbrands and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Wells Fargo 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 Wells Fargo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Wells Fargo Fds, you can compare the effects of market volatilities on Hanesbrands and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Wells Fargo.
Diversification Opportunities for Hanesbrands and Wells Fargo
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanesbrands and Wells is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Wells Fargo Fds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Fds 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Fds has no effect on the direction of Hanesbrands i.e., Hanesbrands and Wells Fargo go up and down completely randomly.
Pair Corralation between Hanesbrands and Wells Fargo
Considering the 90-day investment horizon Hanesbrands is expected to generate 15.3 times more return on investment than Wells Fargo. However, Hanesbrands is 15.3 times more volatile than Wells Fargo Fds. It trades about 0.06 of its potential returns per unit of risk. Wells Fargo Fds is currently generating about 0.1 per unit of risk. If you would invest 472.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 369.00 from holding Hanesbrands or generate 78.18% 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. Wells Fargo Fds
Performance |
| Timeline |
| Hanesbrands |
| Wells Fargo Fds |
Hanesbrands and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Wells Fargo
The main advantage of trading using opposite Hanesbrands and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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