Correlation Between Hanesbrands and Salarius Pharmaceuticals

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

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

Diversification Opportunities for Hanesbrands and Salarius Pharmaceuticals

-0.36

Correlation Coefficient

Hanesbrands  Salarius Pharmaceuticals

Very good diversification

The 3 months correlation between Hanesbrands and Salarius is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Salarius Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salarius Pharmaceuticals 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 Salarius Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salarius Pharmaceuticals has no effect on the direction of Hanesbrands i.e., Hanesbrands and Salarius Pharmaceuticals go up and down completely randomly.

Pair Corralation between Hanesbrands and Salarius Pharmaceuticals

Considering the 90-day investment horizon Hanesbrands is expected to generate 0.58 times more return on investment than Salarius Pharmaceuticals. However, Hanesbrands is 1.72 times less risky than Salarius Pharmaceuticals. It trades about 0.15 of its potential returns per unit of risk. Salarius Pharmaceuticals is currently generating about 0.04 per unit of risk. If you would invest  640.00  in Hanesbrands on September 12, 2024 and sell it today you would earn a total of  201.00  from holding Hanesbrands or generate 31.41% return on investment over 90 days.

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

Hanesbrands  vs.  Salarius Pharmaceuticals

Hanesbrands

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Hanesbrands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Salarius Pharmaceuticals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Salarius Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Salarius Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanesbrands and Salarius Pharmaceuticals

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

The idea behind Hanesbrands and Salarius Pharmaceuticals 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.