Correlation Between Inter Parfums and CureVac NV

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

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

Diversification Opportunities for Inter Parfums and CureVac NV

0.36

Correlation Coefficient

Inter Parfums  CureVac NV

Weak diversification

The 3 months correlation between Inter and CureVac is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV 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 CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of Inter Parfums i.e., Inter Parfums and CureVac NV go up and down completely randomly.

Pair Corralation between Inter Parfums and CureVac NV

Given the investment horizon of 90 days Inter Parfums is expected to under-perform the CureVac NV. But the stock apears to be less risky and, when comparing its historical volatility, Inter Parfums is 2.89 times less risky than CureVac NV. The stock trades about -0.12 of its potential returns per unit of risk. The CureVac NV is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  274.00  in CureVac NV on September 27, 2024 and sell it today you would earn a total of  27.00  from holding CureVac NV or generate 9.85% return on investment over 90 days.

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

Inter Parfums  vs.  CureVac NV

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.

CureVac NV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CureVac NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CureVac NV is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Inter Parfums and CureVac NV

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

The idea behind Inter Parfums and CureVac NV 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.