Correlation Between Hanesbrands and GRIT Real

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

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

Diversification Opportunities for Hanesbrands and GRIT Real

0.84

Correlation Coefficient

Hanesbrands  GRIT Real

Very poor diversification

The 3 months correlation between Hanesbrands and GRIT is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and GRIT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIT Real Estate 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 GRIT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIT Real Estate has no effect on the direction of Hanesbrands i.e., Hanesbrands and GRIT Real go up and down completely randomly.

Pair Corralation between Hanesbrands and GRIT Real

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the GRIT Real. In addition to that, Hanesbrands is 2.37 times more volatile than GRIT Real Estate. It trades about -0.16 of its total potential returns per unit of risk. GRIT Real Estate is currently generating about -0.24 per unit of volatility. If you would invest  1,050  in GRIT Real Estate on December 30, 2024 and sell it today you would lose (200.00) from holding GRIT Real Estate or give up 19.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.38%
Values	Daily Returns

Hanesbrands  vs.  GRIT Real Estate

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.

GRIT Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days GRIT Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic 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 GRIT Real

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

The idea behind Hanesbrands and GRIT Real Estate 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.