Correlation Between Inter Parfums and Henkel AG
Can any of the company-specific risk be diversified away by investing in both Inter Parfums and Henkel AG 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 Henkel AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inter Parfums and Henkel AG Co, you can compare the effects of market volatilities on Inter Parfums and Henkel AG 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 Henkel AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Parfums and Henkel AG.
Diversification Opportunities for Inter Parfums and Henkel AG
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inter and Henkel is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and Henkel AG Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henkel AG 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 Henkel AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henkel AG has no effect on the direction of Inter Parfums i.e., Inter Parfums and Henkel AG go up and down completely randomly.
Pair Corralation between Inter Parfums and Henkel AG
Given the investment horizon of 90 days Inter Parfums is expected to generate 0.81 times more return on investment than Henkel AG. However, Inter Parfums is 1.23 times less risky than Henkel AG. It trades about 0.27 of its potential returns per unit of risk. Henkel AG Co is currently generating about -0.21 per unit of risk. If you would invest 12,441 in Inter Parfums on August 27, 2024 and sell it today you would earn a total of 1,398 from holding Inter Parfums or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inter Parfums vs. Henkel AG Co
Performance |
| Timeline |
| Inter Parfums |
| Henkel AG |
Inter Parfums and Henkel AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inter Parfums and Henkel AG
The main advantage of trading using opposite Inter Parfums and Henkel AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Parfums position performs unexpectedly, Henkel AG 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 Henkel AG will offset losses from the drop in Henkel AG's long position.| Inter Parfums vs. J J Snack | Inter Parfums vs. John B Sanfilippo | Inter Parfums vs. Innospec | Inter Parfums vs. Independent Bank |
| Henkel AG vs. European Wax Center | Henkel AG vs. Edgewell Personal Care | Henkel AG vs. Inter Parfums | Henkel AG vs. Mannatech Incorporated |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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