Correlation Between United Guardian and Inter Parfums
Can any of the company-specific risk be diversified away by investing in both United Guardian 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 United Guardian and Inter Parfums into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and Inter Parfums, you can compare the effects of market volatilities on United Guardian 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 United Guardian with a short position of Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Inter Parfums.
Diversification Opportunities for United Guardian and Inter Parfums
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Inter is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums and United Guardian 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 United Guardian 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 United Guardian i.e., United Guardian and Inter Parfums go up and down completely randomly.
Pair Corralation between United Guardian and Inter Parfums
Allowing for the 90-day total investment horizon United Guardian is expected to generate 1.47 times more return on investment than Inter Parfums. However, United Guardian is 1.47 times more volatile than Inter Parfums. It trades about 0.02 of its potential returns per unit of risk. Inter Parfums is currently generating about 0.02 per unit of risk. If you would invest 1,066 in United Guardian on November 19, 2024 and sell it today you would earn a total of 22.00 from holding United Guardian or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. Inter Parfums
Performance |
| Timeline |
| United Guardian |
| Inter Parfums |
United Guardian and Inter Parfums Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and Inter Parfums
The main advantage of trading using opposite United Guardian and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian 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.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Unity Bancorp |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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