Correlation Between Interparfums and Smcp SAS
Can any of the company-specific risk be diversified away by investing in both Interparfums and Smcp SAS 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 Interparfums and Smcp SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interparfums SA and Smcp SAS, you can compare the effects of market volatilities on Interparfums and Smcp SAS 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 Interparfums with a short position of Smcp SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interparfums and Smcp SAS.
Diversification Opportunities for Interparfums and Smcp SAS
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Interparfums and Smcp is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Interparfums SA and Smcp SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smcp SAS and Interparfums 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 Interparfums SA are associated (or correlated) with Smcp SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smcp SAS has no effect on the direction of Interparfums i.e., Interparfums and Smcp SAS go up and down completely randomly.
Pair Corralation between Interparfums and Smcp SAS
Assuming the 90 days trading horizon Interparfums SA is expected to generate 0.37 times more return on investment than Smcp SAS. However, Interparfums SA is 2.7 times less risky than Smcp SAS. It trades about 0.37 of its potential returns per unit of risk. Smcp SAS is currently generating about -0.16 per unit of risk. If you would invest 3,975 in Interparfums SA on November 4, 2024 and sell it today you would earn a total of 425.00 from holding Interparfums SA or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interparfums SA vs. Smcp SAS
Performance |
| Timeline |
| Interparfums SA |
| Smcp SAS |
Interparfums and Smcp SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interparfums and Smcp SAS
The main advantage of trading using opposite Interparfums and Smcp SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interparfums position performs unexpectedly, Smcp SAS 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 Smcp SAS will offset losses from the drop in Smcp SAS's long position.| Interparfums vs. Remy Cointreau | Interparfums vs. Alten SA | Interparfums vs. Gaztransport Technigaz SAS | Interparfums vs. Trigano SA |
| Smcp SAS vs. Maisons du Monde | Smcp SAS vs. Fnac Darty SA | Smcp SAS vs. Mersen SA | Smcp SAS vs. Interparfums 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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