Correlation Between Church Dwight and Hims Hers
Can any of the company-specific risk be diversified away by investing in both Church Dwight and Hims Hers 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 Church Dwight and Hims Hers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Church Dwight and Hims Hers Health, you can compare the effects of market volatilities on Church Dwight and Hims Hers 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 Church Dwight with a short position of Hims Hers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Church Dwight and Hims Hers.
Diversification Opportunities for Church Dwight and Hims Hers
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Church and Hims is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Church Dwight and Hims Hers Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hims Hers Health and Church Dwight 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 Church Dwight are associated (or correlated) with Hims Hers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hims Hers Health has no effect on the direction of Church Dwight i.e., Church Dwight and Hims Hers go up and down completely randomly.
Pair Corralation between Church Dwight and Hims Hers
Considering the 90-day investment horizon Church Dwight is expected to generate 10.65 times less return on investment than Hims Hers. But when comparing it to its historical volatility, Church Dwight is 2.87 times less risky than Hims Hers. It trades about 0.16 of its potential returns per unit of risk. Hims Hers Health is currently generating about 0.59 of returns per unit of risk over similar time horizon. If you would invest 2,690 in Hims Hers Health on November 7, 2024 and sell it today you would earn a total of 1,495 from holding Hims Hers Health or generate 55.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Church Dwight vs. Hims Hers Health
Performance |
| Timeline |
| Church Dwight |
| Hims Hers Health |
Church Dwight and Hims Hers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Church Dwight and Hims Hers
The main advantage of trading using opposite Church Dwight and Hims Hers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Church Dwight position performs unexpectedly, Hims Hers 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 Hims Hers will offset losses from the drop in Hims Hers' long position.| Church Dwight vs. Kimberly Clark | Church Dwight vs. Colgate Palmolive | Church Dwight vs. Unilever PLC ADR | Church Dwight vs. Procter Gamble |
| Hims Hers vs. ELF Beauty | Hims Hers vs. Newell Brands | Hims Hers vs. Virgin Group Acquisition | Hims Hers vs. Estee Lauder Companies |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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