Correlation Between Hims Hers and Inter Parfums
Can any of the company-specific risk be diversified away by investing in both Hims Hers and Inter Parfums 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 Inter Parfums 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 Inter Parfums, you can compare the effects of market volatilities on Hims Hers and Inter Parfums 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 Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hims Hers and Inter Parfums.
Diversification Opportunities for Hims Hers and Inter Parfums
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hims and Inter is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hims Hers Health and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums 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 Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of Hims Hers i.e., Hims Hers and Inter Parfums go up and down completely randomly.
Pair Corralation between Hims Hers and Inter Parfums
Given the investment horizon of 90 days Hims Hers Health is expected to generate 5.23 times more return on investment than Inter Parfums. However, Hims Hers is 5.23 times more volatile than Inter Parfums. It trades about 0.28 of its potential returns per unit of risk. Inter Parfums is currently generating about 0.25 per unit of risk. If you would invest 1,904 in Hims Hers Health on August 31, 2024 and sell it today you would earn a total of 1,318 from holding Hims Hers Health or generate 69.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hims Hers Health vs. Inter Parfums
Performance |
| Timeline |
| Hims Hers Health |
| Inter Parfums |
Hims Hers and Inter Parfums Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hims Hers and Inter Parfums
The main advantage of trading using opposite Hims Hers and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hims Hers position performs unexpectedly, Inter Parfums 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 Inter Parfums will offset losses from the drop in Inter Parfums' long position.| Hims Hers vs. ELF Beauty | Hims Hers vs. Newell Brands | Hims Hers vs. Virgin Group Acquisition | Hims Hers vs. Estee Lauder Companies |
| Inter Parfums vs. Aquagold International | Inter Parfums vs. Morningstar Unconstrained Allocation | Inter Parfums vs. Thrivent High Yield | Inter Parfums vs. Via Renewables |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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