Correlation Between Hanesbrands and Banco Bilbao

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

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

Diversification Opportunities for Hanesbrands and Banco Bilbao

-0.9

Correlation Coefficient

Hanesbrands  Banco Bilbao

Pay attention - limited upside

The 3 months correlation between Hanesbrands and Banco is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Banco Bilbao Vizcaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Bilbao Vizcaya 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 Banco Bilbao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Bilbao Vizcaya has no effect on the direction of Hanesbrands i.e., Hanesbrands and Banco Bilbao go up and down completely randomly.

Pair Corralation between Hanesbrands and Banco Bilbao

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the Banco Bilbao. In addition to that, Hanesbrands is 1.56 times more volatile than Banco Bilbao Vizcaya. It trades about -0.16 of its total potential returns per unit of risk. Banco Bilbao Vizcaya is currently generating about 0.27 per unit of volatility. If you would invest  20,005  in Banco Bilbao Vizcaya on December 30, 2024 and sell it today you would earn a total of  8,051  from holding Banco Bilbao Vizcaya or generate 40.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Hanesbrands  vs.  Banco Bilbao Vizcaya

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.

Banco Bilbao Vizcaya

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Bilbao Vizcaya are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Banco Bilbao showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanesbrands and Banco Bilbao

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

The idea behind Hanesbrands and Banco Bilbao Vizcaya 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.