Correlation Between Inter Parfums and Bridger Aerospace

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

By analyzing existing cross correlation between Inter Parfums and Bridger Aerospace Group, you can compare the effects of market volatilities on Inter Parfums and Bridger Aerospace 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 Bridger Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Parfums and Bridger Aerospace.

Diversification Opportunities for Inter Parfums and Bridger Aerospace

0.27

Correlation Coefficient

Inter Parfums  Bridger Aerospace

Modest diversification

The 3 months correlation between Inter and Bridger is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace 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 Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of Inter Parfums i.e., Inter Parfums and Bridger Aerospace go up and down completely randomly.

Pair Corralation between Inter Parfums and Bridger Aerospace

Given the investment horizon of 90 days Inter Parfums is expected to generate 78.14 times less return on investment than Bridger Aerospace. But when comparing it to its historical volatility, Inter Parfums is 33.62 times less risky than Bridger Aerospace. It trades about 0.03 of its potential returns per unit of risk. Bridger Aerospace Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Bridger Aerospace Group on October 26, 2024 and sell it today you would earn a total of  2.03  from holding Bridger Aerospace Group or generate 11.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	83.2%
Values	Daily Returns

Inter Parfums  vs.  Bridger Aerospace Group

Inter Parfums

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 10 (%) 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.

Bridger Aerospace

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Bridger Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inter Parfums and Bridger Aerospace

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

The idea behind Inter Parfums and Bridger Aerospace Group 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.