Correlation Between Hanesbrands and VanEck ETF

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

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

Diversification Opportunities for Hanesbrands and VanEck ETF

-0.77

Correlation Coefficient

Hanesbrands  VanEck ETF

Pay attention - limited upside

The 3 months correlation between Hanesbrands and VanEck is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust 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 VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of Hanesbrands i.e., Hanesbrands and VanEck ETF go up and down completely randomly.

Pair Corralation between Hanesbrands and VanEck ETF

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the VanEck ETF. In addition to that, Hanesbrands is 43.14 times more volatile than VanEck ETF Trust. It trades about -0.15 of its total potential returns per unit of risk. VanEck ETF Trust is currently generating about 0.21 per unit of volatility. If you would invest  5,223  in VanEck ETF Trust on December 27, 2024 and sell it today you would earn a total of  49.00  from holding VanEck ETF Trust or generate 0.94% return on investment over 90 days.

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

Hanesbrands  vs.  VanEck ETF Trust

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.

VanEck ETF Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck ETF Trust are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, VanEck ETF is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Hanesbrands and VanEck ETF

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

The idea behind Hanesbrands and VanEck ETF Trust 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.