Correlation Between Hanesbrands and Esotiq Henderson

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

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

Diversification Opportunities for Hanesbrands and Esotiq Henderson

0.41

Correlation Coefficient

Hanesbrands  Esotiq Henderson

Very weak diversification

The 3 months correlation between Hanesbrands and Esotiq is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Esotiq Henderson SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esotiq Henderson 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 Esotiq Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esotiq Henderson has no effect on the direction of Hanesbrands i.e., Hanesbrands and Esotiq Henderson go up and down completely randomly.

Pair Corralation between Hanesbrands and Esotiq Henderson

Considering the 90-day investment horizon Hanesbrands is expected to generate 1.01 times more return on investment than Esotiq Henderson. However, Hanesbrands is 1.01 times more volatile than Esotiq Henderson SA. It trades about 0.17 of its potential returns per unit of risk. Esotiq Henderson SA is currently generating about 0.0 per unit of risk. If you would invest  634.00  in Hanesbrands on September 3, 2024 and sell it today you would earn a total of  236.00  from holding Hanesbrands or generate 37.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Hanesbrands  vs.  Esotiq Henderson SA

Hanesbrands

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Hanesbrands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Esotiq Henderson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Esotiq Henderson SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Esotiq Henderson is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Hanesbrands and Esotiq Henderson

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

The idea behind Hanesbrands and Esotiq Henderson SA 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.