Correlation Between Clorox and Hims Hers
Can any of the company-specific risk be diversified away by investing in both Clorox 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 Clorox and Hims Hers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Clorox and Hims Hers Health, you can compare the effects of market volatilities on Clorox 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 Clorox with a short position of Hims Hers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clorox and Hims Hers.
Diversification Opportunities for Clorox and Hims Hers
Weak diversification
The 3 months correlation between Clorox and Hims is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding The Clorox 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 Clorox 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 The Clorox 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 Clorox i.e., Clorox and Hims Hers go up and down completely randomly.
Pair Corralation between Clorox and Hims Hers
Considering the 90-day investment horizon Clorox is expected to generate 8.68 times less return on investment than Hims Hers. But when comparing it to its historical volatility, The Clorox is 11.27 times less risky than Hims Hers. It trades about 0.34 of its potential returns per unit of risk. Hims Hers Health is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,904 in Hims Hers Health on August 31, 2024 and sell it today you would earn a total of 1,130 from holding Hims Hers Health or generate 59.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Clorox vs. Hims Hers Health
Performance |
| Timeline |
| Clorox |
| Hims Hers Health |
Clorox and Hims Hers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clorox and Hims Hers
The main advantage of trading using opposite Clorox and Hims Hers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clorox 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.| Clorox vs. Aquagold International | Clorox vs. Morningstar Unconstrained Allocation | Clorox vs. Thrivent High Yield | Clorox vs. Via Renewables |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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