Correlation Between Hanesbrands and William Blair

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

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

Diversification Opportunities for Hanesbrands and William Blair

0.59

Correlation Coefficient

Hanesbrands  William Blair

Very weak diversification

The 3 months correlation between Hanesbrands and William is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and William Blair Emerg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair Emerg 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 William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Emerg has no effect on the direction of Hanesbrands i.e., Hanesbrands and William Blair go up and down completely randomly.

Pair Corralation between Hanesbrands and William Blair

Considering the 90-day investment horizon Hanesbrands is expected to under-perform the William Blair. In addition to that, Hanesbrands is 3.33 times more volatile than William Blair Emerg. It trades about -0.18 of its total potential returns per unit of risk. William Blair Emerg is currently generating about -0.13 per unit of volatility. If you would invest  1,319  in William Blair Emerg on December 1, 2024 and sell it today you would lose (101.00) from holding William Blair Emerg or give up 7.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Hanesbrands  vs.  William Blair Emerg

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.

William Blair Emerg

Risk-Adjusted Performance

Very Weak

Over the last 90 days William Blair Emerg has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Hanesbrands and William Blair

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

The idea behind Hanesbrands and William Blair Emerg 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.