Correlation Between Hanesbrands and C Media

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

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

Diversification Opportunities for Hanesbrands and C Media

0.19

Correlation Coefficient

Hanesbrands  C Media

Average diversification

The 3 months correlation between Hanesbrands and 6237 is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and C Media Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Media Electronics 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 C Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Media Electronics has no effect on the direction of Hanesbrands i.e., Hanesbrands and C Media go up and down completely randomly.

Pair Corralation between Hanesbrands and C Media

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the C Media. But the stock apears to be less risky and, when comparing its historical volatility, Hanesbrands is 1.04 times less risky than C Media. The stock trades about -0.15 of its potential returns per unit of risk. The C Media Electronics is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  5,580  in C Media Electronics on December 28, 2024 and sell it today you would lose (870.00) from holding C Media Electronics or give up 15.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Hanesbrands  vs.  C Media Electronics

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.

C Media Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days C Media Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Hanesbrands and C Media

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

The idea behind Hanesbrands and C Media Electronics 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.