Correlation Between Hims Hers and Herbalife Nutrition
Can any of the company-specific risk be diversified away by investing in both Hims Hers and Herbalife Nutrition 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 Herbalife Nutrition 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 Herbalife Nutrition, you can compare the effects of market volatilities on Hims Hers and Herbalife Nutrition 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 Herbalife Nutrition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hims Hers and Herbalife Nutrition.
Diversification Opportunities for Hims Hers and Herbalife Nutrition
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hims and Herbalife is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hims Hers Health and Herbalife Nutrition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herbalife Nutrition 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 Herbalife Nutrition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herbalife Nutrition has no effect on the direction of Hims Hers i.e., Hims Hers and Herbalife Nutrition go up and down completely randomly.
Pair Corralation between Hims Hers and Herbalife Nutrition
Given the investment horizon of 90 days Hims Hers Health is expected to generate 2.45 times more return on investment than Herbalife Nutrition. However, Hims Hers is 2.45 times more volatile than Herbalife Nutrition. It trades about 0.1 of its potential returns per unit of risk. Herbalife Nutrition is currently generating about 0.24 per unit of risk. If you would invest 2,152 in Hims Hers Health on August 25, 2024 and sell it today you would earn a total of 263.00 from holding Hims Hers Health or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hims Hers Health vs. Herbalife Nutrition
Performance |
| Timeline |
| Hims Hers Health |
| Herbalife Nutrition |
Hims Hers and Herbalife Nutrition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hims Hers and Herbalife Nutrition
The main advantage of trading using opposite Hims Hers and Herbalife Nutrition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hims Hers position performs unexpectedly, Herbalife Nutrition 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 Herbalife Nutrition will offset losses from the drop in Herbalife Nutrition'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 |
| Herbalife Nutrition vs. Honest Company | Herbalife Nutrition vs. Hims Hers Health | Herbalife Nutrition vs. Procter Gamble | Herbalife Nutrition vs. Coty Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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