Correlation Between Hims Hers and Dynatronics

Can any of the company-specific risk be diversified away by investing in both Hims Hers and Dynatronics 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 Dynatronics 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 Dynatronics, you can compare the effects of market volatilities on Hims Hers and Dynatronics 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 Dynatronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hims Hers and Dynatronics.

Diversification Opportunities for Hims Hers and Dynatronics

-0.59

Correlation Coefficient

Hims Hers  Dynatronics

Excellent diversification

The 3 months correlation between Hims and Dynatronics is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hims Hers Health and Dynatronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynatronics 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 Dynatronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynatronics has no effect on the direction of Hims Hers i.e., Hims Hers and Dynatronics go up and down completely randomly.

Pair Corralation between Hims Hers and Dynatronics

Given the investment horizon of 90 days Hims Hers Health is expected to generate 0.86 times more return on investment than Dynatronics. However, Hims Hers Health is 1.17 times less risky than Dynatronics. It trades about 0.15 of its potential returns per unit of risk. Dynatronics is currently generating about -0.01 per unit of risk. If you would invest  1,025  in Hims Hers Health on February 26, 2024 and sell it today you would earn a total of  663.00  from holding Hims Hers Health or generate 64.68% 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.  Dynatronics

Hims Hers Health

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hims Hers Health are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile primary indicators, Hims Hers unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dynatronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dynatronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Dynatronics is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hims Hers and Dynatronics

The main advantage of trading using opposite Hims Hers and Dynatronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hims Hers position performs unexpectedly, Dynatronics 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 Dynatronics will offset losses from the drop in Dynatronics' long position.

The idea behind Hims Hers Health and Dynatronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.