Correlation Between Hanesbrands and Assystem

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

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

Diversification Opportunities for Hanesbrands and Assystem

-0.35

Correlation Coefficient

Hanesbrands  Assystem

Very good diversification

The 3 months correlation between Hanesbrands and Assystem is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Assystem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assystem SA 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 Assystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assystem SA has no effect on the direction of Hanesbrands i.e., Hanesbrands and Assystem go up and down completely randomly.

Pair Corralation between Hanesbrands and Assystem

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the Assystem. In addition to that, Hanesbrands is 2.13 times more volatile than Assystem SA. It trades about -0.31 of its total potential returns per unit of risk. Assystem SA is currently generating about 0.16 per unit of volatility. If you would invest  3,770  in Assystem SA on December 1, 2024 and sell it today you would earn a total of  290.00  from holding Assystem SA or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Hanesbrands  vs.  Assystem SA

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.

Assystem SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Assystem SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Assystem sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanesbrands and Assystem

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

The idea behind Hanesbrands and Assystem SA 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.