Correlation Between Exel Industries and Interparfums
Can any of the company-specific risk be diversified away by investing in both Exel Industries and Interparfums 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 Exel Industries and Interparfums into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exel Industries and Interparfums SA, you can compare the effects of market volatilities on Exel Industries and Interparfums 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 Exel Industries with a short position of Interparfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exel Industries and Interparfums.
Diversification Opportunities for Exel Industries and Interparfums
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exel and Interparfums is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Exel Industries and Interparfums SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interparfums SA and Exel Industries 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 Exel Industries are associated (or correlated) with Interparfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interparfums SA has no effect on the direction of Exel Industries i.e., Exel Industries and Interparfums go up and down completely randomly.
Pair Corralation between Exel Industries and Interparfums
Assuming the 90 days trading horizon Exel Industries is expected to generate 0.64 times more return on investment than Interparfums. However, Exel Industries is 1.57 times less risky than Interparfums. It trades about -0.25 of its potential returns per unit of risk. Interparfums SA is currently generating about -0.18 per unit of risk. If you would invest 4,740 in Exel Industries on August 30, 2024 and sell it today you would lose (280.00) from holding Exel Industries or give up 5.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Exel Industries vs. Interparfums SA
Performance |
| Timeline |
| Exel Industries |
| Interparfums SA |
Exel Industries and Interparfums Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exel Industries and Interparfums
The main advantage of trading using opposite Exel Industries and Interparfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exel Industries position performs unexpectedly, Interparfums 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 Interparfums will offset losses from the drop in Interparfums' long position.| Exel Industries vs. Manitou BF SA | Exel Industries vs. Lisi SA | Exel Industries vs. Guerbet S A | Exel Industries vs. Haulotte Group SA |
| Interparfums vs. Remy Cointreau | Interparfums vs. Alten SA | Interparfums vs. Gaztransport Technigaz SAS | Interparfums vs. Trigano SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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