Correlation Between Hims Hers and Virgin Group
Can any of the company-specific risk be diversified away by investing in both Hims Hers and Virgin Group 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 Virgin Group 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 Virgin Group Acquisition, you can compare the effects of market volatilities on Hims Hers and Virgin Group 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 Virgin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hims Hers and Virgin Group.
Diversification Opportunities for Hims Hers and Virgin Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hims and Virgin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hims Hers Health and Virgin Group Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virgin Group Acquisition 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 Virgin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virgin Group Acquisition has no effect on the direction of Hims Hers i.e., Hims Hers and Virgin Group go up and down completely randomly.
Pair Corralation between Hims Hers and Virgin Group
Given the investment horizon of 90 days Hims Hers Health is expected to generate 1.52 times more return on investment than Virgin Group. However, Hims Hers is 1.52 times more volatile than Virgin Group Acquisition. It trades about 0.16 of its potential returns per unit of risk. Virgin Group Acquisition is currently generating about 0.04 per unit of risk. If you would invest 1,450 in Hims Hers Health on November 2, 2024 and sell it today you would earn a total of 1,946 from holding Hims Hers Health or generate 134.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hims Hers Health vs. Virgin Group Acquisition
Performance |
| Timeline |
| Hims Hers Health |
| Virgin Group Acquisition |
Hims Hers and Virgin Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hims Hers and Virgin Group
The main advantage of trading using opposite Hims Hers and Virgin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hims Hers position performs unexpectedly, Virgin Group 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 Virgin Group will offset losses from the drop in Virgin Group'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 |
| Virgin Group vs. Mannatech Incorporated | Virgin Group vs. Edgewell Personal Care | Virgin Group vs. Inter Parfums | Virgin Group vs. Nu Skin Enterprises |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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