Correlation Between Inter Parfums and OS Therapies

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

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

Diversification Opportunities for Inter Parfums and OS Therapies

-0.01

Correlation Coefficient

Inter Parfums  OS Therapies

Good diversification

The 3 months correlation between Inter and OSTX is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and OS Therapies Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OS Therapies 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 OS Therapies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OS Therapies has no effect on the direction of Inter Parfums i.e., Inter Parfums and OS Therapies go up and down completely randomly.

Pair Corralation between Inter Parfums and OS Therapies

Given the investment horizon of 90 days Inter Parfums is expected to under-perform the OS Therapies. But the stock apears to be less risky and, when comparing its historical volatility, Inter Parfums is 13.25 times less risky than OS Therapies. The stock trades about -0.16 of its potential returns per unit of risk. The OS Therapies Incorporated is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  250.00  in OS Therapies Incorporated on October 11, 2024 and sell it today you would earn a total of  262.00  from holding OS Therapies Incorporated or generate 104.8% return on investment over 90 days.

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

Inter Parfums  vs.  OS Therapies Incorporated

Inter Parfums

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Inter Parfums may actually be approaching a critical reversion point that can send shares even higher in February 2025.

OS Therapies

Risk-Adjusted Performance

10 of 100

OK

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

Pair Trading with Inter Parfums and OS Therapies

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

The idea behind Inter Parfums and OS Therapies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.