Correlation Between Inter Parfums and Mannatech Incorporated

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

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

Diversification Opportunities for Inter Parfums and Mannatech Incorporated

0.11

Correlation Coefficient

Inter Parfums  Mannatech Incorporated

Average diversification

The 3 months correlation between Inter and Mannatech is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and Mannatech Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mannatech Incorporated 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 Mannatech Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mannatech Incorporated has no effect on the direction of Inter Parfums i.e., Inter Parfums and Mannatech Incorporated go up and down completely randomly.

Pair Corralation between Inter Parfums and Mannatech Incorporated

Given the investment horizon of 90 days Inter Parfums is expected to generate 0.51 times more return on investment than Mannatech Incorporated. However, Inter Parfums is 1.97 times less risky than Mannatech Incorporated. It trades about 0.08 of its potential returns per unit of risk. Mannatech Incorporated is currently generating about 0.04 per unit of risk. If you would invest  12,801  in Inter Parfums on August 30, 2024 and sell it today you would earn a total of  1,008  from holding Inter Parfums or generate 7.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Inter Parfums  vs.  Mannatech Incorporated

Inter Parfums

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Inter Parfums may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Mannatech Incorporated

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mannatech Incorporated are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Mannatech Incorporated may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Inter Parfums and Mannatech Incorporated

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

The idea behind Inter Parfums and Mannatech Incorporated 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.