Correlation Between Hanesbrands and Schibsted ASA
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Schibsted ASA 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 Schibsted ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Schibsted ASA A, you can compare the effects of market volatilities on Hanesbrands and Schibsted ASA 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 Schibsted ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Schibsted ASA.
Diversification Opportunities for Hanesbrands and Schibsted ASA
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanesbrands and Schibsted is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Schibsted ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schibsted ASA A 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 Schibsted ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schibsted ASA A has no effect on the direction of Hanesbrands i.e., Hanesbrands and Schibsted ASA go up and down completely randomly.
Pair Corralation between Hanesbrands and Schibsted ASA
Considering the 90-day investment horizon Hanesbrands is expected to generate 2.1 times less return on investment than Schibsted ASA. In addition to that, Hanesbrands is 1.13 times more volatile than Schibsted ASA A. It trades about 0.04 of its total potential returns per unit of risk. Schibsted ASA A is currently generating about 0.09 per unit of volatility. If you would invest 1,018 in Schibsted ASA A on September 3, 2024 and sell it today you would earn a total of 2,136 from holding Schibsted ASA A or generate 209.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Hanesbrands vs. Schibsted ASA A
Performance |
| Timeline |
| Hanesbrands |
| Schibsted ASA A |
Hanesbrands and Schibsted ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Schibsted ASA
The main advantage of trading using opposite Hanesbrands and Schibsted ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Schibsted ASA 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 Schibsted ASA will offset losses from the drop in Schibsted ASA's long position.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Schibsted ASA vs. Superior Plus Corp | Schibsted ASA vs. NMI Holdings | Schibsted ASA vs. Origin Agritech | Schibsted ASA vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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