Correlation Between Shiseido and Inter Parfums
Can any of the company-specific risk be diversified away by investing in both Shiseido and Inter Parfums 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 Shiseido and Inter Parfums into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shiseido Company and Inter Parfums, you can compare the effects of market volatilities on Shiseido and Inter Parfums 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 Shiseido with a short position of Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shiseido and Inter Parfums.
Diversification Opportunities for Shiseido and Inter Parfums
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shiseido and Inter is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shiseido Company and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums and Shiseido 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 Shiseido Company are associated (or correlated) with Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of Shiseido i.e., Shiseido and Inter Parfums go up and down completely randomly.
Pair Corralation between Shiseido and Inter Parfums
Assuming the 90 days horizon Shiseido Company is expected to under-perform the Inter Parfums. In addition to that, Shiseido is 1.11 times more volatile than Inter Parfums. It trades about -0.36 of its total potential returns per unit of risk. Inter Parfums is currently generating about 0.27 per unit of volatility. If you would invest 12,441 in Inter Parfums on August 28, 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 |
Shiseido Company vs. Inter Parfums
Performance |
| Timeline |
| Shiseido |
| Inter Parfums |
Shiseido and Inter Parfums Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shiseido and Inter Parfums
The main advantage of trading using opposite Shiseido and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shiseido position performs unexpectedly, Inter Parfums 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 Inter Parfums will offset losses from the drop in Inter Parfums' long position.| Shiseido vs. Reckitt Benckiser Group | Shiseido vs. Church Dwight | Shiseido vs. Kimberly Clark de Mexico | Shiseido vs. LOreal Co ADR |
| Inter Parfums vs. J J Snack | Inter Parfums vs. John B Sanfilippo | Inter Parfums vs. Innospec | Inter Parfums vs. Independent Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |