Correlation Between Inter Parfums and NESNVX

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

By analyzing existing cross correlation between Inter Parfums and NESNVX 47 15 JAN 53, you can compare the effects of market volatilities on Inter Parfums and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Parfums and NESNVX.

Diversification Opportunities for Inter Parfums and NESNVX

-0.31

Correlation Coefficient

Inter Parfums  NESNVX

Very good diversification

The 3 months correlation between Inter and NESNVX is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and NESNVX 47 15 JAN 53 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 47 15 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 47 15 has no effect on the direction of Inter Parfums i.e., Inter Parfums and NESNVX go up and down completely randomly.

Pair Corralation between Inter Parfums and NESNVX

Given the investment horizon of 90 days Inter Parfums is expected to under-perform the NESNVX. But the stock apears to be less risky and, when comparing its historical volatility, Inter Parfums is 1.11 times less risky than NESNVX. The stock trades about -0.07 of its potential returns per unit of risk. The NESNVX 47 15 JAN 53 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  8,891  in NESNVX 47 15 JAN 53 on December 24, 2024 and sell it today you would earn a total of  954.00  from holding NESNVX 47 15 JAN 53 or generate 10.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

Inter Parfums  vs.  NESNVX 47 15 JAN 53

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 latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

NESNVX 47 15

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NESNVX 47 15 JAN 53 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, NESNVX sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inter Parfums and NESNVX

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

The idea behind Inter Parfums and NESNVX 47 15 JAN 53 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.