Correlation Between Hims Hers and LOreal Co
Can any of the company-specific risk be diversified away by investing in both Hims Hers and LOreal Co 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 LOreal Co 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 LOreal Co ADR, you can compare the effects of market volatilities on Hims Hers and LOreal Co 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 LOreal Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hims Hers and LOreal Co.
Diversification Opportunities for Hims Hers and LOreal Co
Pay attention - limited upside
The 3 months correlation between Hims and LOreal is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hims Hers Health and LOreal Co ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOreal Co 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 LOreal Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOreal Co ADR has no effect on the direction of Hims Hers i.e., Hims Hers and LOreal Co go up and down completely randomly.
Pair Corralation between Hims Hers and LOreal Co
Given the investment horizon of 90 days Hims Hers Health is expected to generate 5.66 times more return on investment than LOreal Co. However, Hims Hers is 5.66 times more volatile than LOreal Co ADR. It trades about 0.05 of its potential returns per unit of risk. LOreal Co ADR is currently generating about 0.1 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. LOreal Co ADR
Performance |
| Timeline |
| Hims Hers Health |
| LOreal Co ADR |
Hims Hers and LOreal Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hims Hers and LOreal Co
The main advantage of trading using opposite Hims Hers and LOreal Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hims Hers position performs unexpectedly, LOreal Co 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 LOreal Co will offset losses from the drop in LOreal Co'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 |
| LOreal Co vs. Becle SA de | LOreal Co vs. Naked Wines plc | LOreal Co vs. Willamette Valley Vineyards | LOreal Co vs. Fresh Grapes LLC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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