Correlation Between Hanesbrands and Pro Medicus

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

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

Diversification Opportunities for Hanesbrands and Pro Medicus

-0.56

Correlation Coefficient

Hanesbrands  Pro Medicus

Excellent diversification

The 3 months correlation between Hanesbrands and Pro is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Pro Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Medicus 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 Pro Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Medicus has no effect on the direction of Hanesbrands i.e., Hanesbrands and Pro Medicus go up and down completely randomly.

Pair Corralation between Hanesbrands and Pro Medicus

Considering the 90-day investment horizon Hanesbrands is expected to generate 3.3 times less return on investment than Pro Medicus. In addition to that, Hanesbrands is 1.61 times more volatile than Pro Medicus. It trades about 0.03 of its total potential returns per unit of risk. Pro Medicus is currently generating about 0.14 per unit of volatility. If you would invest  6,075  in Pro Medicus on December 2, 2024 and sell it today you would earn a total of  19,250  from holding Pro Medicus or generate 316.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.0%
Values	Daily Returns

Hanesbrands  vs.  Pro Medicus

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.

Pro Medicus

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Medicus are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Pro Medicus is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hanesbrands and Pro Medicus

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

The idea behind Hanesbrands and Pro Medicus 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.