Correlation Between Hims Hers and Newell Brands
Can any of the company-specific risk be diversified away by investing in both Hims Hers and Newell Brands 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 Newell Brands 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 Newell Brands, you can compare the effects of market volatilities on Hims Hers and Newell Brands 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 Newell Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hims Hers and Newell Brands.
Diversification Opportunities for Hims Hers and Newell Brands
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hims and Newell is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hims Hers Health and Newell Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newell Brands 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 Newell Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newell Brands has no effect on the direction of Hims Hers i.e., Hims Hers and Newell Brands go up and down completely randomly.
Pair Corralation between Hims Hers and Newell Brands
Given the investment horizon of 90 days Hims Hers is expected to generate 1.02 times less return on investment than Newell Brands. In addition to that, Hims Hers is 1.8 times more volatile than Newell Brands. It trades about 0.1 of its total potential returns per unit of risk. Newell Brands is currently generating about 0.19 per unit of volatility. If you would invest 732.00 in Newell Brands on August 24, 2024 and sell it today you would earn a total of 162.00 from holding Newell Brands or generate 22.13% 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. Newell Brands
Performance |
| Timeline |
| Hims Hers Health |
| Newell Brands |
Hims Hers and Newell Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hims Hers and Newell Brands
The main advantage of trading using opposite Hims Hers and Newell Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hims Hers position performs unexpectedly, Newell Brands 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 Newell Brands will offset losses from the drop in Newell Brands' long position.| Hims Hers vs. ELF Beauty | Hims Hers vs. Newell Brands | Hims Hers vs. Virgin Group Acquisition | Hims Hers vs. Estee Lauder Companies |
| Newell Brands vs. The Clorox | Newell Brands vs. Colgate Palmolive | Newell Brands vs. Procter Gamble | Newell Brands vs. Unilever PLC ADR |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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