Correlation Between Hanesbrands and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Mfs Lifetime 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 Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Mfs Lifetime 2065, you can compare the effects of market volatilities on Hanesbrands and Mfs Lifetime 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 Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Mfs Lifetime.
Diversification Opportunities for Hanesbrands and Mfs Lifetime
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hanesbrands and Mfs is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Mfs Lifetime 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2065 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 Mfs Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Lifetime 2065 has no effect on the direction of Hanesbrands i.e., Hanesbrands and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Hanesbrands and Mfs Lifetime
Considering the 90-day investment horizon Hanesbrands is expected to generate 5.25 times more return on investment than Mfs Lifetime. However, Hanesbrands is 5.25 times more volatile than Mfs Lifetime 2065. It trades about 0.05 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.1 per unit of risk. If you would invest 490.00 in Hanesbrands on September 11, 2024 and sell it today you would earn a total of 347.00 from holding Hanesbrands or generate 70.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Hanesbrands vs. Mfs Lifetime 2065
Performance |
Timeline |
Hanesbrands |
Mfs Lifetime 2065 |
Hanesbrands and Mfs Lifetime Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanesbrands and Mfs Lifetime
The main advantage of trading using opposite Hanesbrands and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Mfs Lifetime 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 Mfs Lifetime will offset losses from the drop in Mfs Lifetime's long position.Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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