Correlation Between Hanesbrands and Evolve Automobile

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

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

Diversification Opportunities for Hanesbrands and Evolve Automobile

0.6

Correlation Coefficient

Hanesbrands  Evolve Automobile

Poor diversification

The 3 months correlation between Hanesbrands and Evolve is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Evolve Automobile Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Automobile 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 Evolve Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Automobile has no effect on the direction of Hanesbrands i.e., Hanesbrands and Evolve Automobile go up and down completely randomly.

Pair Corralation between Hanesbrands and Evolve Automobile

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the Evolve Automobile. In addition to that, Hanesbrands is 1.74 times more volatile than Evolve Automobile Innovation. It trades about -0.16 of its total potential returns per unit of risk. Evolve Automobile Innovation is currently generating about -0.1 per unit of volatility. If you would invest  2,069  in Evolve Automobile Innovation on December 30, 2024 and sell it today you would lose (249.00) from holding Evolve Automobile Innovation or give up 12.03% of portfolio value over 90 days.

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

Hanesbrands  vs.  Evolve Automobile Innovation

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.

Evolve Automobile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolve Automobile Innovation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Hanesbrands and Evolve Automobile

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

The idea behind Hanesbrands and Evolve Automobile Innovation 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..