Correlation Between Estee Lauder and Hims Hers
Can any of the company-specific risk be diversified away by investing in both Estee Lauder 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 Estee Lauder and Hims Hers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Estee Lauder Companies and Hims Hers Health, you can compare the effects of market volatilities on Estee Lauder 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 Estee Lauder with a short position of Hims Hers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Hims Hers.
Diversification Opportunities for Estee Lauder and Hims Hers
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Estee and Hims is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies 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 Estee Lauder 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 Estee Lauder Companies 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 Estee Lauder i.e., Estee Lauder and Hims Hers go up and down completely randomly.
Pair Corralation between Estee Lauder and Hims Hers
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Hims Hers. But the stock apears to be less risky and, when comparing its historical volatility, Estee Lauder Companies is 1.71 times less risky than Hims Hers. The stock trades about -0.07 of its potential returns per unit of risk. The Hims Hers Health is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 895.00 in Hims Hers Health on August 27, 2024 and sell it today you would earn a total of 1,638 from holding Hims Hers Health or generate 183.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. Hims Hers Health
Performance |
| Timeline |
| Estee Lauder Companies |
| Hims Hers Health |
Estee Lauder and Hims Hers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Hims Hers
The main advantage of trading using opposite Estee Lauder and Hims Hers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder 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.| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Kimberly Clark |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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