Correlation Between Inter Parfums and Artisan Partners

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

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

Diversification Opportunities for Inter Parfums and Artisan Partners

0.41

Correlation Coefficient

Inter Parfums  Artisan Partners

Very weak diversification

The 3 months correlation between Inter and Artisan is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and Artisan Partners Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Partners Asset and Inter Parfums 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 Inter Parfums are associated (or correlated) with Artisan Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Partners Asset has no effect on the direction of Inter Parfums i.e., Inter Parfums and Artisan Partners go up and down completely randomly.

Pair Corralation between Inter Parfums and Artisan Partners

Given the investment horizon of 90 days Inter Parfums is expected to generate 1.24 times less return on investment than Artisan Partners. In addition to that, Inter Parfums is 1.18 times more volatile than Artisan Partners Asset. It trades about 0.03 of its total potential returns per unit of risk. Artisan Partners Asset is currently generating about 0.04 per unit of volatility. If you would invest  3,204  in Artisan Partners Asset on October 23, 2024 and sell it today you would earn a total of  1,083  from holding Artisan Partners Asset or generate 33.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Inter Parfums  vs.  Artisan Partners Asset

Inter Parfums

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Inter Parfums reported solid returns over the last few months and may actually be approaching a breakup point.

Artisan Partners Asset

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Partners Asset are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Artisan Partners is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Inter Parfums and Artisan Partners

The main advantage of trading using opposite Inter Parfums and Artisan Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Parfums position performs unexpectedly, Artisan Partners 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 Artisan Partners will offset losses from the drop in Artisan Partners' long position.

The idea behind Inter Parfums and Artisan Partners Asset 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.