Correlation Between Hengan International and Hims Hers
Can any of the company-specific risk be diversified away by investing in both Hengan International 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 Hengan International and Hims Hers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hengan International Group and Hims Hers Health, you can compare the effects of market volatilities on Hengan International 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 Hengan International with a short position of Hims Hers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hengan International and Hims Hers.
Diversification Opportunities for Hengan International and Hims Hers
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hengan and Hims is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hengan International Group 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 Hengan International 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 Hengan International Group 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 Hengan International i.e., Hengan International and Hims Hers go up and down completely randomly.
Pair Corralation between Hengan International and Hims Hers
Assuming the 90 days horizon Hengan International Group is expected to under-perform the Hims Hers. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hengan International Group is 3.18 times less risky than Hims Hers. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Hims Hers Health is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,165 in Hims Hers Health on September 3, 2024 and sell it today you would earn a total of 2,057 from holding Hims Hers Health or generate 176.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hengan International Group vs. Hims Hers Health
Performance |
| Timeline |
| Hengan International |
| Hims Hers Health |
Hengan International and Hims Hers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hengan International and Hims Hers
The main advantage of trading using opposite Hengan International and Hims Hers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hengan International 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.| Hengan International vs. LOral SA | Hengan International vs. LOreal Co ADR | Hengan International vs. Unilever PLC ADR | Hengan International 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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