Correlation Between Hanesbrands and Aeroports
Can any of the company-specific risk be diversified away by investing in both Hanesbrands and Aeroports 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 Aeroports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Aeroports de Paris, you can compare the effects of market volatilities on Hanesbrands and Aeroports 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 Aeroports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Aeroports.
Diversification Opportunities for Hanesbrands and Aeroports
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanesbrands and Aeroports is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris 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 Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of Hanesbrands i.e., Hanesbrands and Aeroports go up and down completely randomly.
Pair Corralation between Hanesbrands and Aeroports
Considering the 90-day investment horizon Hanesbrands is expected to under-perform the Aeroports. In addition to that, Hanesbrands is 1.93 times more volatile than Aeroports de Paris. It trades about -0.16 of its total potential returns per unit of risk. Aeroports de Paris is currently generating about -0.14 per unit of volatility. If you would invest 11,130 in Aeroports de Paris on December 31, 2024 and sell it today you would lose (1,595) from holding Aeroports de Paris or give up 14.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 96.83% |
Values | Daily Returns |
Hanesbrands vs. Aeroports de Paris
Performance |
Timeline |
Hanesbrands |
Aeroports de Paris |
Hanesbrands and Aeroports Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hanesbrands and Aeroports
The main advantage of trading using opposite Hanesbrands and Aeroports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands position performs unexpectedly, Aeroports 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 Aeroports will offset losses from the drop in Aeroports' long position.Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
Aeroports vs. Playtech plc | Aeroports vs. COLUMBIA SPORTSWEAR | Aeroports vs. United Microelectronics Corp | Aeroports vs. TRAVEL LEISURE DL 01 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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