Correlation Between Procter Gamble and Hims Hers

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Can any of the company-specific risk be diversified away by investing in both Procter Gamble and Hims Hers 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 Procter Gamble and Hims Hers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Procter Gamble and Hims Hers Health, you can compare the effects of market volatilities on Procter Gamble and Hims Hers 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 Procter Gamble with a short position of Hims Hers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Procter Gamble and Hims Hers.

Diversification Opportunities for Procter Gamble and Hims Hers

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Procter and Hims is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Procter Gamble and Hims Hers Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hims Hers Health and Procter Gamble 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 Procter Gamble are associated (or correlated) with Hims Hers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hims Hers Health has no effect on the direction of Procter Gamble i.e., Procter Gamble and Hims Hers go up and down completely randomly.

Pair Corralation between Procter Gamble and Hims Hers

Allowing for the 90-day total investment horizon Procter Gamble is expected to generate 0.34 times more return on investment than Hims Hers. However, Procter Gamble is 2.92 times less risky than Hims Hers. It trades about -0.08 of its potential returns per unit of risk. Hims Hers Health is currently generating about -0.59 per unit of risk. If you would invest  16,062  in Procter Gamble on January 22, 2024 and sell it today you would lose (248.00) from holding Procter Gamble or give up 1.54% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Procter Gamble  vs.  Hims Hers Health

 Performance 
       Timeline  
Procter Gamble 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Procter Gamble are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Procter Gamble may actually be approaching a critical reversion point that can send shares even higher in May 2024.
Hims Hers Health 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hims Hers Health are ranked lower than 9 (%) 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.

Procter Gamble and Hims Hers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Procter Gamble and Hims Hers

The main advantage of trading using opposite Procter Gamble and Hims Hers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Procter Gamble position performs unexpectedly, Hims Hers 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 Hims Hers will offset losses from the drop in Hims Hers' long position.
The idea behind Procter Gamble and Hims Hers Health 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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