Correlation Between Hanesbrands and XinJiang GuoTong

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

By analyzing existing cross correlation between Hanesbrands and XinJiang GuoTong Pipeline, you can compare the effects of market volatilities on Hanesbrands and XinJiang GuoTong 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 XinJiang GuoTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and XinJiang GuoTong.

Diversification Opportunities for Hanesbrands and XinJiang GuoTong

-0.52

Correlation Coefficient

Hanesbrands  XinJiang GuoTong

Excellent diversification

The 3 months correlation between Hanesbrands and XinJiang is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and XinJiang GuoTong Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XinJiang GuoTong Pipeline 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 XinJiang GuoTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XinJiang GuoTong Pipeline has no effect on the direction of Hanesbrands i.e., Hanesbrands and XinJiang GuoTong go up and down completely randomly.

Pair Corralation between Hanesbrands and XinJiang GuoTong

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the XinJiang GuoTong. In addition to that, Hanesbrands is 1.11 times more volatile than XinJiang GuoTong Pipeline. It trades about -0.16 of its total potential returns per unit of risk. XinJiang GuoTong Pipeline is currently generating about 0.05 per unit of volatility. If you would invest  869.00  in XinJiang GuoTong Pipeline on December 30, 2024 and sell it today you would earn a total of  53.00  from holding XinJiang GuoTong Pipeline or generate 6.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

Hanesbrands  vs.  XinJiang GuoTong Pipeline

Hanesbrands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hanesbrands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

XinJiang GuoTong Pipeline

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XinJiang GuoTong Pipeline are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, XinJiang GuoTong may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hanesbrands and XinJiang GuoTong

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

The idea behind Hanesbrands and XinJiang GuoTong Pipeline 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.