Correlation Between Hanesbrands and Trump Media

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

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

Diversification Opportunities for Hanesbrands and Trump Media

0.89

Correlation Coefficient

Hanesbrands  Trump Media

Very poor diversification

The 3 months correlation between Hanesbrands and Trump is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Trump Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trump Media Technology 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 Trump Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trump Media Technology has no effect on the direction of Hanesbrands i.e., Hanesbrands and Trump Media go up and down completely randomly.

Pair Corralation between Hanesbrands and Trump Media

Considering the 90-day investment horizon Hanesbrands is expected to generate 0.64 times more return on investment than Trump Media. However, Hanesbrands is 1.57 times less risky than Trump Media. It trades about -0.15 of its potential returns per unit of risk. Trump Media Technology is currently generating about -0.14 per unit of risk. If you would invest  812.00  in Hanesbrands on December 29, 2024 and sell it today you would lose (225.00) from holding Hanesbrands or give up 27.71% of portfolio value over 90 days.

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

Hanesbrands  vs.  Trump Media Technology

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.

Trump Media Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trump Media Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Stock's forward-looking indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hanesbrands and Trump Media

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

The idea behind Hanesbrands and Trump Media Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.