Correlation Between Gildan Activewear and 98385XAM8

Can any of the company-specific risk be diversified away by investing in both Gildan Activewear and 98385XAM8 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 Gildan Activewear and 98385XAM8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gildan Activewear and XTO ENERGY INC, you can compare the effects of market volatilities on Gildan Activewear and 98385XAM8 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 Gildan Activewear with a short position of 98385XAM8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gildan Activewear and 98385XAM8.

Diversification Opportunities for Gildan Activewear and 98385XAM8

-0.55

Correlation Coefficient

Gildan Activewear  98385XAM8

Excellent diversification

The 3 months correlation between Gildan and 98385XAM8 is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gildan Activewear and XTO ENERGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTO ENERGY INC and Gildan Activewear 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 Gildan Activewear are associated (or correlated) with 98385XAM8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTO ENERGY INC has no effect on the direction of Gildan Activewear i.e., Gildan Activewear and 98385XAM8 go up and down completely randomly.

Pair Corralation between Gildan Activewear and 98385XAM8

Considering the 90-day investment horizon Gildan Activewear is expected to under-perform the 98385XAM8. In addition to that, Gildan Activewear is 2.03 times more volatile than XTO ENERGY INC. It trades about -0.03 of its total potential returns per unit of risk. XTO ENERGY INC is currently generating about 0.04 per unit of volatility. If you would invest  11,199  in XTO ENERGY INC on December 24, 2024 and sell it today you would earn a total of  130.00  from holding XTO ENERGY INC or generate 1.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	63.93%
Values	Daily Returns

Gildan Activewear  vs.  XTO ENERGY INC

Gildan Activewear

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gildan Activewear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Gildan Activewear is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

XTO ENERGY INC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XTO ENERGY INC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 98385XAM8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gildan Activewear and 98385XAM8

The main advantage of trading using opposite Gildan Activewear and 98385XAM8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gildan Activewear position performs unexpectedly, 98385XAM8 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 98385XAM8 will offset losses from the drop in 98385XAM8's long position.

The idea behind Gildan Activewear and XTO ENERGY INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.