Correlation Between JX Luxventure and Hanesbrands

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

By analyzing existing cross correlation between JX Luxventure Limited and Hanesbrands, you can compare the effects of market volatilities on JX Luxventure and Hanesbrands 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 JX Luxventure with a short position of Hanesbrands. Check out your portfolio center. Please also check ongoing floating volatility patterns of JX Luxventure and Hanesbrands.

Diversification Opportunities for JX Luxventure and Hanesbrands

-0.69

Correlation Coefficient

JX Luxventure  Hanesbrands

Excellent diversification

The 3 months correlation between JXG and Hanesbrands is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding JX Luxventure Limited and Hanesbrands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanesbrands and JX Luxventure 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 JX Luxventure Limited are associated (or correlated) with Hanesbrands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanesbrands has no effect on the direction of JX Luxventure i.e., JX Luxventure and Hanesbrands go up and down completely randomly.

Pair Corralation between JX Luxventure and Hanesbrands

Considering the 90-day investment horizon JX Luxventure Limited is expected to under-perform the Hanesbrands. In addition to that, JX Luxventure is 4.44 times more volatile than Hanesbrands. It trades about -0.02 of its total potential returns per unit of risk. Hanesbrands is currently generating about -0.04 per unit of volatility. If you would invest  837.00  in Hanesbrands on October 8, 2024 and sell it today you would lose (13.00) from holding Hanesbrands or give up 1.55% of portfolio value over 90 days.

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

JX Luxventure Limited  vs.  Hanesbrands

JX Luxventure Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JX Luxventure Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hanesbrands

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 5 (%) 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.

Pair Trading with JX Luxventure and Hanesbrands

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

The idea behind JX Luxventure Limited and Hanesbrands 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.