Correlation Between Inter Parfums and Kenvue

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

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

Diversification Opportunities for Inter Parfums and Kenvue

-0.46

Correlation Coefficient

Inter Parfums  Kenvue

Very good diversification

The 3 months correlation between Inter and Kenvue is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and Kenvue Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenvue Inc 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 Kenvue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenvue Inc has no effect on the direction of Inter Parfums i.e., Inter Parfums and Kenvue go up and down completely randomly.

Pair Corralation between Inter Parfums and Kenvue

Given the investment horizon of 90 days Inter Parfums is expected to under-perform the Kenvue. In addition to that, Inter Parfums is 1.4 times more volatile than Kenvue Inc. It trades about -0.04 of its total potential returns per unit of risk. Kenvue Inc is currently generating about 0.14 per unit of volatility. If you would invest  2,097  in Kenvue Inc on December 29, 2024 and sell it today you would earn a total of  253.00  from holding Kenvue Inc or generate 12.06% return on investment over 90 days.

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

Inter Parfums  vs.  Kenvue Inc

Inter Parfums

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inter Parfums has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Inter Parfums is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Kenvue Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kenvue Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Kenvue may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Inter Parfums and Kenvue

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

The idea behind Inter Parfums and Kenvue Inc 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.