Correlation Between Hanesbrands and Sixt SE

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

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

Diversification Opportunities for Hanesbrands and Sixt SE

-0.44

Correlation Coefficient

Hanesbrands  Sixt SE

Very good diversification

The 3 months correlation between Hanesbrands and Sixt is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Sixt SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixt SE 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 Sixt SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixt SE has no effect on the direction of Hanesbrands i.e., Hanesbrands and Sixt SE go up and down completely randomly.

Pair Corralation between Hanesbrands and Sixt SE

Considering the 90-day investment horizon Hanesbrands is expected to generate 1.79 times more return on investment than Sixt SE. However, Hanesbrands is 1.79 times more volatile than Sixt SE. It trades about 0.03 of its potential returns per unit of risk. Sixt SE is currently generating about -0.02 per unit of risk. If you would invest  506.00  in Hanesbrands on December 2, 2024 and sell it today you would earn a total of  97.00  from holding Hanesbrands or generate 19.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.61%
Values	Daily Returns

Hanesbrands  vs.  Sixt SE

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.

Sixt SE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sixt SE are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Sixt SE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanesbrands and Sixt SE

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

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