Correlation Between Figs and Hanesbrands

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Can any of the company-specific risk be diversified away by investing in both Figs 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 Figs and Hanesbrands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and Hanesbrands, you can compare the effects of market volatilities on Figs 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 Figs with a short position of Hanesbrands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and Hanesbrands.

Diversification Opportunities for Figs and Hanesbrands

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Figs and Hanesbrands is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Hanesbrands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanesbrands and Figs 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 Figs Inc 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 Figs i.e., Figs and Hanesbrands go up and down completely randomly.

Pair Corralation between Figs and Hanesbrands

Given the investment horizon of 90 days Figs Inc is expected to under-perform the Hanesbrands. In addition to that, Figs is 1.02 times more volatile than Hanesbrands. It trades about -0.01 of its total potential returns per unit of risk. Hanesbrands is currently generating about 0.03 per unit of volatility. If you would invest  522.00  in Hanesbrands on December 29, 2023 and sell it today you would earn a total of  38.00  from holding Hanesbrands or generate 7.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Figs Inc  vs.  Hanesbrands

 Performance 
       Timeline  
Figs Inc 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Figs Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Hanesbrands 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain fundamental drivers, Hanesbrands demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Figs and Hanesbrands Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Figs and Hanesbrands

The main advantage of trading using opposite Figs and Hanesbrands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs 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 Figs Inc 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.
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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