Correlation Between Hanesbrands and Invesco Exchange

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

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

Diversification Opportunities for Hanesbrands and Invesco Exchange

-0.19

Correlation Coefficient

Hanesbrands  Invesco Exchange

Good diversification

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

Pair Corralation between Hanesbrands and Invesco Exchange

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the Invesco Exchange. In addition to that, Hanesbrands is 16.19 times more volatile than Invesco Exchange Traded Self Indexed. It trades about -0.27 of its total potential returns per unit of risk. Invesco Exchange Traded Self Indexed is currently generating about 0.31 per unit of volatility. If you would invest  2,006  in Invesco Exchange Traded Self Indexed on December 2, 2024 and sell it today you would earn a total of  39.00  from holding Invesco Exchange Traded Self Indexed or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hanesbrands  vs.  Invesco Exchange Traded Self I

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.

Invesco Exchange Traded

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Exchange Traded Self Indexed are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, Invesco Exchange 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 Invesco Exchange

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

The idea behind Hanesbrands and Invesco Exchange Traded Self Indexed 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.