Correlation Between Vuzix Corp and Hanesbrands

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

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

Diversification Opportunities for Vuzix Corp and Hanesbrands

-0.24

Correlation Coefficient

Vuzix Corp  Hanesbrands

Very good diversification

The 3 months correlation between Vuzix and Hanesbrands is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Vuzix Corp Cmn and Hanesbrands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanesbrands and Vuzix Corp 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 Vuzix Corp Cmn 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 Vuzix Corp i.e., Vuzix Corp and Hanesbrands go up and down completely randomly.

Pair Corralation between Vuzix Corp and Hanesbrands

Given the investment horizon of 90 days Vuzix Corp Cmn is expected to under-perform the Hanesbrands. In addition to that, Vuzix Corp is 1.39 times more volatile than Hanesbrands. It trades about -0.03 of its total potential returns per unit of risk. Hanesbrands is currently generating about -0.04 per unit of volatility. If you would invest  1,222  in Hanesbrands on February 5, 2024 and sell it today you would lose (778.00) from holding Hanesbrands or give up 63.67% of portfolio value over 90 days.

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

Vuzix Corp Cmn  vs.  Hanesbrands

Vuzix Corp Cmn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vuzix Corp Cmn 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 basic indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Hanesbrands

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Hanesbrands is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Vuzix Corp and Hanesbrands

The main advantage of trading using opposite Vuzix Corp and Hanesbrands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vuzix Corp 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 Vuzix Corp Cmn 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.