Correlation Between Jerash Holdings and Hanesbrands
Can any of the company-specific risk be diversified away by investing in both Jerash Holdings 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 Jerash Holdings and Hanesbrands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jerash Holdings and Hanesbrands, you can compare the effects of market volatilities on Jerash Holdings 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 Jerash Holdings with a short position of Hanesbrands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jerash Holdings and Hanesbrands.
Diversification Opportunities for Jerash Holdings and Hanesbrands
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jerash and Hanesbrands is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Jerash Holdings and Hanesbrands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanesbrands and Jerash Holdings 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 Jerash Holdings 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 Jerash Holdings i.e., Jerash Holdings and Hanesbrands go up and down completely randomly.
Pair Corralation between Jerash Holdings and Hanesbrands
Given the investment horizon of 90 days Jerash Holdings is expected to generate 0.33 times more return on investment than Hanesbrands. However, Jerash Holdings is 3.0 times less risky than Hanesbrands. It trades about 0.06 of its potential returns per unit of risk. Hanesbrands is currently generating about -0.11 per unit of risk. If you would invest 303.00 in Jerash Holdings on January 26, 2024 and sell it today you would earn a total of 4.50 from holding Jerash Holdings or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jerash Holdings vs. Hanesbrands
Performance |
| Timeline |
| Jerash Holdings |
| Hanesbrands |
Jerash Holdings and Hanesbrands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jerash Holdings and Hanesbrands
The main advantage of trading using opposite Jerash Holdings and Hanesbrands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jerash Holdings 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.| Jerash Holdings vs. Vince Holding Corp | Jerash Holdings vs. Oxford Industries | Jerash Holdings vs. Gildan Activewear | Jerash Holdings vs. Columbia Sportswear |
| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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