Correlation Between Hanesbrands and Puloon Technology

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

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

Diversification Opportunities for Hanesbrands and Puloon Technology

-0.47

Correlation Coefficient

Hanesbrands  Puloon Technology

Very good diversification

The 3 months correlation between Hanesbrands and Puloon is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon Technology 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 Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of Hanesbrands i.e., Hanesbrands and Puloon Technology go up and down completely randomly.

Pair Corralation between Hanesbrands and Puloon Technology

Considering the 90-day investment horizon Hanesbrands is expected to generate 1.03 times more return on investment than Puloon Technology. However, Hanesbrands is 1.03 times more volatile than Puloon Technology. It trades about 0.03 of its potential returns per unit of risk. Puloon Technology is currently generating about 0.01 per unit of risk. If you would invest  506.00  in Hanesbrands on December 2, 2024 and sell it today you would earn a total of  97.00  from holding Hanesbrands or generate 19.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.17%
Values	Daily Returns

Hanesbrands  vs.  Puloon Technology

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.

Puloon Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Puloon Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Puloon Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanesbrands and Puloon Technology

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

The idea behind Hanesbrands and Puloon Technology 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.