Correlation Between Hanesbrands and CHS
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and CHS 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 CHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and CHS Inc CL, you can compare the effects of market volatilities on Hanesbrands and CHS 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 CHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and CHS.
Diversification Opportunities for Hanesbrands and CHS
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and CHS is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and CHS Inc CL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHS Inc CL 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 CHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHS Inc CL has no effect on the direction of Hanesbrands i.e., Hanesbrands and CHS go up and down completely randomly.
Pair Corralation between Hanesbrands and CHS
Considering the 90-day investment horizon Hanesbrands is expected to under-perform the CHS. In addition to that, Hanesbrands is 7.52 times more volatile than CHS Inc CL. It trades about -0.15 of its total potential returns per unit of risk. CHS Inc CL is currently generating about 0.05 per unit of volatility. If you would invest 2,531 in CHS Inc CL on December 29, 2024 and sell it today you would earn a total of 29.00 from holding CHS Inc CL or generate 1.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hanesbrands vs. CHS Inc CL
Performance |
Timeline |
Hanesbrands |
CHS Inc CL |
Hanesbrands and CHS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanesbrands and CHS
The main advantage of trading using opposite Hanesbrands and CHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, CHS 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 CHS will offset losses from the drop in CHS's long position.Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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