Correlation Between Hims Hers and Koninklijke Philips
Can any of the company-specific risk be diversified away by investing in both Hims Hers and Koninklijke Philips 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 Koninklijke Philips 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 Koninklijke Philips NV, you can compare the effects of market volatilities on Hims Hers and Koninklijke Philips 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 Koninklijke Philips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hims Hers and Koninklijke Philips.
Diversification Opportunities for Hims Hers and Koninklijke Philips
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hims and Koninklijke is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hims Hers Health and Koninklijke Philips NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Philips 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 Koninklijke Philips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Philips has no effect on the direction of Hims Hers i.e., Hims Hers and Koninklijke Philips go up and down completely randomly.
Pair Corralation between Hims Hers and Koninklijke Philips
Given the investment horizon of 90 days Hims Hers Health is expected to generate 2.02 times more return on investment than Koninklijke Philips. However, Hims Hers is 2.02 times more volatile than Koninklijke Philips NV. It trades about 0.06 of its potential returns per unit of risk. Koninklijke Philips NV is currently generating about 0.04 per unit of risk. If you would invest 1,204 in Hims Hers Health on August 27, 2024 and sell it today you would earn a total of 1,329 from holding Hims Hers Health or generate 110.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hims Hers Health vs. Koninklijke Philips NV
Performance |
| Timeline |
| Hims Hers Health |
| Koninklijke Philips |
Hims Hers and Koninklijke Philips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hims Hers and Koninklijke Philips
The main advantage of trading using opposite Hims Hers and Koninklijke Philips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hims Hers position performs unexpectedly, Koninklijke Philips 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 Koninklijke Philips will offset losses from the drop in Koninklijke Philips' long position.| Hims Hers vs. ELF Beauty | Hims Hers vs. Newell Brands | Hims Hers vs. Virgin Group Acquisition | Hims Hers vs. Estee Lauder Companies |
| Koninklijke Philips vs. Heartbeam | Koninklijke Philips vs. EUDA Health Holdings | Koninklijke Philips vs. Nutex Health | Koninklijke Philips vs. Healthcare Triangle |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |