Correlation Between Remy Cointreau and Interparfums
Can any of the company-specific risk be diversified away by investing in both Remy Cointreau 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 Remy Cointreau and Interparfums into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Remy Cointreau and Interparfums SA, you can compare the effects of market volatilities on Remy Cointreau 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 Remy Cointreau with a short position of Interparfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of Remy Cointreau and Interparfums.
Diversification Opportunities for Remy Cointreau and Interparfums
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Remy and Interparfums is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Remy Cointreau and Interparfums SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interparfums SA and Remy Cointreau 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 Remy Cointreau 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 Remy Cointreau i.e., Remy Cointreau and Interparfums go up and down completely randomly.
Pair Corralation between Remy Cointreau and Interparfums
Assuming the 90 days trading horizon Remy Cointreau is expected to under-perform the Interparfums. In addition to that, Remy Cointreau is 1.09 times more volatile than Interparfums SA. It trades about -0.08 of its total potential returns per unit of risk. Interparfums SA is currently generating about 0.0 per unit of volatility. If you would invest 4,292 in Interparfums SA on August 26, 2024 and sell it today you would lose (372.00) from holding Interparfums SA or give up 8.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Remy Cointreau vs. Interparfums SA
Performance |
| Timeline |
| Remy Cointreau |
| Interparfums SA |
Remy Cointreau and Interparfums Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Remy Cointreau and Interparfums
The main advantage of trading using opposite Remy Cointreau and Interparfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Remy Cointreau 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.| Remy Cointreau vs. Pernod Ricard SA | Remy Cointreau vs. SEB SA | Remy Cointreau vs. Sodexo SA | Remy Cointreau vs. Wendel |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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