Correlation Between HPX Corp and Inter Parfums

Can any of the company-specific risk be diversified away by investing in both HPX Corp 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 HPX Corp and Inter Parfums into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HPX Corp and Inter Parfums, you can compare the effects of market volatilities on HPX Corp 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 HPX Corp with a short position of Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of HPX Corp and Inter Parfums.

Diversification Opportunities for HPX Corp and Inter Parfums

0.11

Correlation Coefficient

HPX Corp  Inter Parfums

Average diversification

The 3 months correlation between HPX and Inter is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding HPX Corp and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums and HPX Corp 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 HPX Corp 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 HPX Corp i.e., HPX Corp and Inter Parfums go up and down completely randomly.

Pair Corralation between HPX Corp and Inter Parfums

If you would invest  1,725  in HPX Corp on September 27, 2024 and sell it today you would earn a total of  0.00  from holding HPX Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

HPX Corp  vs.  Inter Parfums

HPX Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HPX Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, HPX Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Inter Parfums

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Inter Parfums is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with HPX Corp and Inter Parfums

The main advantage of trading using opposite HPX Corp and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HPX Corp 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.

The idea behind HPX Corp and Inter Parfums pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.