Correlation Between Hanesbrands and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Invesco Municipal 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 Invesco Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Invesco Municipal Income, you can compare the effects of market volatilities on Hanesbrands and Invesco Municipal 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 Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Invesco Municipal.
Diversification Opportunities for Hanesbrands and Invesco Municipal
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Invesco is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Invesco Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Income 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 Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Income has no effect on the direction of Hanesbrands i.e., Hanesbrands and Invesco Municipal go up and down completely randomly.
Pair Corralation between Hanesbrands and Invesco Municipal
Considering the 90-day investment horizon Hanesbrands is expected to generate 10.42 times more return on investment than Invesco Municipal. However, Hanesbrands is 10.42 times more volatile than Invesco Municipal Income. It trades about 0.2 of its potential returns per unit of risk. Invesco Municipal Income is currently generating about 0.42 per unit of risk. If you would invest 790.00 in Hanesbrands on September 12, 2024 and sell it today you would earn a total of 76.00 from holding Hanesbrands or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hanesbrands vs. Invesco Municipal Income
Performance |
| Timeline |
| Hanesbrands |
| Invesco Municipal Income |
Hanesbrands and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Invesco Municipal
The main advantage of trading using opposite Hanesbrands and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Invesco Municipal 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 Invesco Municipal will offset losses from the drop in Invesco Municipal'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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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