Correlation Between Hanesbrands and Bellevue Gold

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

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

Diversification Opportunities for Hanesbrands and Bellevue Gold

-0.62

Correlation Coefficient

Hanesbrands  Bellevue Gold

Excellent diversification

The 3 months correlation between Hanesbrands and Bellevue is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Bellevue Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Gold Limited 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 Bellevue Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Gold Limited has no effect on the direction of Hanesbrands i.e., Hanesbrands and Bellevue Gold go up and down completely randomly.

Pair Corralation between Hanesbrands and Bellevue Gold

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the Bellevue Gold. In addition to that, Hanesbrands is 1.11 times more volatile than Bellevue Gold Limited. It trades about -0.16 of its total potential returns per unit of risk. Bellevue Gold Limited is currently generating about 0.06 per unit of volatility. If you would invest  71.00  in Bellevue Gold Limited on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Bellevue Gold Limited or generate 8.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Hanesbrands  vs.  Bellevue Gold Limited

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.

Bellevue Gold Limited

Risk-Adjusted Performance

Insignificant

Over the last 90 days Bellevue Gold Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak technical and fundamental indicators, Bellevue Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hanesbrands and Bellevue Gold

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

The idea behind Hanesbrands and Bellevue Gold Limited 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.