Correlation Between Inter Parfums and Hillman Solutions

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

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

Diversification Opportunities for Inter Parfums and Hillman Solutions

0.09

Correlation Coefficient

Inter Parfums  Hillman Solutions

Significant diversification

The 3 months correlation between Inter and Hillman is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and Hillman Solutions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillman Solutions Corp 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 Hillman Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillman Solutions Corp has no effect on the direction of Inter Parfums i.e., Inter Parfums and Hillman Solutions go up and down completely randomly.

Pair Corralation between Inter Parfums and Hillman Solutions

Given the investment horizon of 90 days Inter Parfums is expected to generate 0.93 times more return on investment than Hillman Solutions. However, Inter Parfums is 1.08 times less risky than Hillman Solutions. It trades about 0.15 of its potential returns per unit of risk. Hillman Solutions Corp is currently generating about -0.04 per unit of risk. If you would invest  12,065  in Inter Parfums on October 24, 2024 and sell it today you would earn a total of  1,794  from holding Inter Parfums or generate 14.87% return on investment over 90 days.

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

Inter Parfums  vs.  Hillman Solutions Corp

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.

Hillman Solutions Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hillman Solutions Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Hillman Solutions is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Inter Parfums and Hillman Solutions

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

The idea behind Inter Parfums and Hillman Solutions Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.