Correlation Between Hanesbrands and Amprius Technologies

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

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

Diversification Opportunities for Hanesbrands and Amprius Technologies

-0.64

Correlation Coefficient

Hanesbrands  Amprius Technologies

Excellent diversification

The 3 months correlation between Hanesbrands and Amprius is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Amprius Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amprius Technologies 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 Amprius Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amprius Technologies has no effect on the direction of Hanesbrands i.e., Hanesbrands and Amprius Technologies go up and down completely randomly.

Pair Corralation between Hanesbrands and Amprius Technologies

Considering the 90-day investment horizon Hanesbrands is expected to generate 0.56 times more return on investment than Amprius Technologies. However, Hanesbrands is 1.78 times less risky than Amprius Technologies. It trades about 0.06 of its potential returns per unit of risk. Amprius Technologies is currently generating about -0.43 per unit of risk. If you would invest  614.00  in Hanesbrands on June 9, 2024 and sell it today you would earn a total of  18.00  from holding Hanesbrands or generate 2.93% return on investment over 90 days.

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

Hanesbrands  vs.  Amprius Technologies

Hanesbrands

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hanesbrands are ranked lower than 8 (%) 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.

Amprius Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amprius Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in October 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hanesbrands and Amprius Technologies

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

The idea behind Hanesbrands and Amprius Technologies 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.