Correlation Between Hims Hers and Beiersdorf
Can any of the company-specific risk be diversified away by investing in both Hims Hers and Beiersdorf 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 Hims Hers and Beiersdorf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hims Hers Health and Beiersdorf AG ADR, you can compare the effects of market volatilities on Hims Hers and Beiersdorf 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 Hims Hers with a short position of Beiersdorf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hims Hers and Beiersdorf.
Diversification Opportunities for Hims Hers and Beiersdorf
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hims and Beiersdorf is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hims Hers Health and Beiersdorf AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beiersdorf AG ADR and Hims Hers 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 Hims Hers Health are associated (or correlated) with Beiersdorf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beiersdorf AG ADR has no effect on the direction of Hims Hers i.e., Hims Hers and Beiersdorf go up and down completely randomly.
Pair Corralation between Hims Hers and Beiersdorf
Given the investment horizon of 90 days Hims Hers Health is expected to generate 5.45 times more return on investment than Beiersdorf. However, Hims Hers is 5.45 times more volatile than Beiersdorf AG ADR. It trades about 0.05 of its potential returns per unit of risk. Beiersdorf AG ADR is currently generating about 0.03 per unit of risk. If you would invest 2,533 in Hims Hers Health on September 23, 2024 and sell it today you would earn a total of 87.00 from holding Hims Hers Health or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hims Hers Health vs. Beiersdorf AG ADR
Performance |
| Timeline |
| Hims Hers Health |
| Beiersdorf AG ADR |
Hims Hers and Beiersdorf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hims Hers and Beiersdorf
The main advantage of trading using opposite Hims Hers and Beiersdorf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hims Hers position performs unexpectedly, Beiersdorf 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 Beiersdorf will offset losses from the drop in Beiersdorf's long position.| Hims Hers vs. ELF Beauty | Hims Hers vs. Newell Brands | Hims Hers vs. Virgin Group Acquisition | Hims Hers vs. Estee Lauder Companies |
| Beiersdorf vs. LOreal Co ADR | Beiersdorf vs. Estee Lauder Companies | Beiersdorf vs. Church Dwight | Beiersdorf vs. LOral SA |
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 Stocks Directory module to find actively traded stocks across global markets.
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