Correlation Between Inter Parfums and Hengan International
Can any of the company-specific risk be diversified away by investing in both Inter Parfums and Hengan International 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 Hengan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Parfums and Hengan International Group, you can compare the effects of market volatilities on Inter Parfums and Hengan International 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 Hengan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Parfums and Hengan International.
Diversification Opportunities for Inter Parfums and Hengan International
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inter and Hengan is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and Hengan International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hengan International 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 Hengan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hengan International has no effect on the direction of Inter Parfums i.e., Inter Parfums and Hengan International go up and down completely randomly.
Pair Corralation between Inter Parfums and Hengan International
Given the investment horizon of 90 days Inter Parfums is expected to generate 1.28 times more return on investment than Hengan International. However, Inter Parfums is 1.28 times more volatile than Hengan International Group. It trades about 0.05 of its potential returns per unit of risk. Hengan International Group is currently generating about -0.04 per unit of risk. If you would invest 9,158 in Inter Parfums on September 3, 2024 and sell it today you would earn a total of 4,608 from holding Inter Parfums or generate 50.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inter Parfums vs. Hengan International Group
Performance |
| Timeline |
| Inter Parfums |
| Hengan International |
Inter Parfums and Hengan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inter Parfums and Hengan International
The main advantage of trading using opposite Inter Parfums and Hengan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Parfums position performs unexpectedly, Hengan International 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 Hengan International will offset losses from the drop in Hengan International's long position.| Inter Parfums vs. Highway Holdings Limited | Inter Parfums vs. QCR Holdings | Inter Parfums vs. Partner Communications | Inter Parfums vs. Acumen Pharmaceuticals |
| Hengan International vs. LOral SA | Hengan International vs. LOreal Co ADR | Hengan International vs. Unilever PLC ADR | Hengan International vs. Kimberly Clark |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |