Correlation Between Inter Parfums and TKO Group

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

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

Diversification Opportunities for Inter Parfums and TKO Group

0.69

Correlation Coefficient

Inter Parfums  TKO Group

Poor diversification

The 3 months correlation between Inter and TKO is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and TKO Group Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TKO Group Holdings, 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 TKO Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TKO Group Holdings, has no effect on the direction of Inter Parfums i.e., Inter Parfums and TKO Group go up and down completely randomly.

Pair Corralation between Inter Parfums and TKO Group

Given the investment horizon of 90 days Inter Parfums is expected to generate 5.39 times less return on investment than TKO Group. In addition to that, Inter Parfums is 1.05 times more volatile than TKO Group Holdings,. It trades about 0.03 of its total potential returns per unit of risk. TKO Group Holdings, is currently generating about 0.14 per unit of volatility. If you would invest  10,705  in TKO Group Holdings, on October 22, 2024 and sell it today you would earn a total of  3,515  from holding TKO Group Holdings, or generate 32.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.2%
Values	Daily Returns

Inter Parfums  vs.  TKO Group Holdings,

Inter Parfums

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 12 (%) 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.

TKO Group Holdings,

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TKO Group Holdings, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward-looking signals, TKO Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Inter Parfums and TKO Group

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

The idea behind Inter Parfums and TKO Group Holdings, 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.