Correlation Between Hims Hers and Otsuka
Can any of the company-specific risk be diversified away by investing in both Hims Hers and Otsuka 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 Otsuka 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 Otsuka, you can compare the effects of market volatilities on Hims Hers and Otsuka 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 Otsuka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hims Hers and Otsuka.
Diversification Opportunities for Hims Hers and Otsuka
Poor diversification
The 3 months correlation between Hims and Otsuka is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hims Hers Health and Otsuka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka 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 Otsuka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka has no effect on the direction of Hims Hers i.e., Hims Hers and Otsuka go up and down completely randomly.
Pair Corralation between Hims Hers and Otsuka
Given the investment horizon of 90 days Hims Hers Health is expected to generate 0.13 times more return on investment than Otsuka. However, Hims Hers Health is 7.46 times less risky than Otsuka. It trades about 0.09 of its potential returns per unit of risk. Otsuka is currently generating about -0.1 per unit of risk. If you would invest 651.00 in Hims Hers Health on September 12, 2024 and sell it today you would earn a total of 2,436 from holding Hims Hers Health or generate 374.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 29.49% |
| Values | Daily Returns |
Hims Hers Health vs. Otsuka
Performance |
| Timeline |
| Hims Hers Health |
| Otsuka |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hims Hers and Otsuka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hims Hers and Otsuka
The main advantage of trading using opposite Hims Hers and Otsuka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hims Hers position performs unexpectedly, Otsuka 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 Otsuka will offset losses from the drop in Otsuka'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 |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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