Correlation Between Hanesbrands and Kumba Iron
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Kumba Iron 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 Kumba Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Kumba Iron Ore, you can compare the effects of market volatilities on Hanesbrands and Kumba Iron 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 Kumba Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Kumba Iron.
Diversification Opportunities for Hanesbrands and Kumba Iron
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanesbrands and Kumba is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Kumba Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumba Iron Ore 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 Kumba Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumba Iron Ore has no effect on the direction of Hanesbrands i.e., Hanesbrands and Kumba Iron go up and down completely randomly.
Pair Corralation between Hanesbrands and Kumba Iron
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.43 times more return on investment than Kumba Iron. However, Hanesbrands is 1.43 times more volatile than Kumba Iron Ore. It trades about 0.04 of its potential returns per unit of risk. Kumba Iron Ore is currently generating about -0.01 per unit of risk. If you would invest 596.00 in Hanesbrands on September 5, 2024 and sell it today you would earn a total of 271.00 from holding Hanesbrands or generate 45.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.19% |
Values | Daily Returns |
Hanesbrands vs. Kumba Iron Ore
Performance |
Timeline |
Hanesbrands |
Kumba Iron Ore |
Hanesbrands and Kumba Iron Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanesbrands and Kumba Iron
The main advantage of trading using opposite Hanesbrands and Kumba Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Kumba Iron 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 Kumba Iron will offset losses from the drop in Kumba Iron's long position.Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
Kumba Iron vs. RCL Foods | Kumba Iron vs. Astoria Investments | Kumba Iron vs. Europa Metals | Kumba Iron vs. Standard Bank Group |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data |