Correlation Between Hanesbrands and Industrivarden

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

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

Diversification Opportunities for Hanesbrands and Industrivarden

-0.75

Correlation Coefficient

Hanesbrands  Industrivarden

Pay attention - limited upside

The 3 months correlation between Hanesbrands and Industrivarden is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser 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 Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Hanesbrands i.e., Hanesbrands and Industrivarden go up and down completely randomly.

Pair Corralation between Hanesbrands and Industrivarden

Considering the 90-day investment horizon Hanesbrands is expected to generate 1.04 times less return on investment than Industrivarden. In addition to that, Hanesbrands is 3.33 times more volatile than Industrivarden AB ser. It trades about 0.03 of its total potential returns per unit of risk. Industrivarden AB ser is currently generating about 0.1 per unit of volatility. If you would invest  25,681  in Industrivarden AB ser on December 2, 2024 and sell it today you would earn a total of  14,889  from holding Industrivarden AB ser or generate 57.98% return on investment over 90 days.

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

Hanesbrands  vs.  Industrivarden AB ser

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.

Industrivarden AB ser

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrivarden AB ser are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Industrivarden may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hanesbrands and Industrivarden

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

The idea behind Hanesbrands and Industrivarden AB ser 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.