Correlation Between Hanesbrands and 21Shares Bitcoin

Can any of the company-specific risk be diversified away by investing in both Hanesbrands and 21Shares Bitcoin 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 21Shares Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hanesbrands and 21Shares Bitcoin ETP, you can compare the effects of market volatilities on Hanesbrands and 21Shares Bitcoin 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 21Shares Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and 21Shares Bitcoin.

Diversification Opportunities for Hanesbrands and 21Shares Bitcoin

0.36

Correlation Coefficient

Hanesbrands  21Shares Bitcoin

Weak diversification

The 3 months correlation between Hanesbrands and 21Shares is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and 21Shares Bitcoin ETP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 21Shares Bitcoin ETP 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 21Shares Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 21Shares Bitcoin ETP has no effect on the direction of Hanesbrands i.e., Hanesbrands and 21Shares Bitcoin go up and down completely randomly.

Pair Corralation between Hanesbrands and 21Shares Bitcoin

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the 21Shares Bitcoin. But the stock apears to be less risky and, when comparing its historical volatility, Hanesbrands is 1.25 times less risky than 21Shares Bitcoin. The stock trades about -0.18 of its potential returns per unit of risk. The 21Shares Bitcoin ETP is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,579  in 21Shares Bitcoin ETP on December 2, 2024 and sell it today you would lose (43.00) from holding 21Shares Bitcoin ETP or give up 1.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Hanesbrands  vs.  21Shares Bitcoin ETP

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.

21Shares Bitcoin ETP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 21Shares Bitcoin ETP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, 21Shares Bitcoin is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Hanesbrands and 21Shares Bitcoin

The main advantage of trading using opposite Hanesbrands and 21Shares Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, 21Shares Bitcoin 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 21Shares Bitcoin will offset losses from the drop in 21Shares Bitcoin's long position.

The idea behind Hanesbrands and 21Shares Bitcoin ETP 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.