Correlation Between Inter Parfums and Berkeley
Can any of the company-specific risk be diversified away by investing in both Inter Parfums and Berkeley 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 Inter Parfums and Berkeley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Parfums and The Berkeley Group, you can compare the effects of market volatilities on Inter Parfums and Berkeley 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 Inter Parfums with a short position of Berkeley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Parfums and Berkeley.
Diversification Opportunities for Inter Parfums and Berkeley
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Inter and Berkeley is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and The Berkeley Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkeley Group and Inter Parfums 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 Inter Parfums are associated (or correlated) with Berkeley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkeley Group has no effect on the direction of Inter Parfums i.e., Inter Parfums and Berkeley go up and down completely randomly.
Pair Corralation between Inter Parfums and Berkeley
Given the investment horizon of 90 days Inter Parfums is expected to generate about the same return on investment as The Berkeley Group. However, Inter Parfums is 1.22 times more volatile than The Berkeley Group. It trades about 0.03 of its potential returns per unit of risk. The Berkeley Group is currently producing about 0.04 per unit of risk. If you would invest 5,292 in The Berkeley Group on September 1, 2024 and sell it today you would earn a total of 822.00 from holding The Berkeley Group or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 55.82% |
| Values | Daily Returns |
Inter Parfums vs. The Berkeley Group
Performance |
| Timeline |
| Inter Parfums |
| Berkeley Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Inter Parfums and Berkeley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inter Parfums and Berkeley
The main advantage of trading using opposite Inter Parfums and Berkeley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Parfums position performs unexpectedly, Berkeley 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 Berkeley will offset losses from the drop in Berkeley's long position.| Inter Parfums vs. Seneca Foods Corp | Inter Parfums vs. Central Garden Pet | Inter Parfums vs. Central Garden Pet | Inter Parfums vs. Lifeway Foods |
| Berkeley vs. Summit Environmental | Berkeley vs. Merit Medical Systems | Berkeley vs. Sonida Senior Living | Berkeley vs. Cumberland Pharmaceuticals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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