Correlation Between Interparfums and Exel Industries

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

By analyzing existing cross correlation between Interparfums SA and Exel Industries, you can compare the effects of market volatilities on Interparfums and Exel Industries 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 Interparfums with a short position of Exel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interparfums and Exel Industries.

Diversification Opportunities for Interparfums and Exel Industries

0.18

Correlation Coefficient

Interparfums  Exel Industries

Average diversification

The 3 months correlation between Interparfums and Exel is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Interparfums SA and Exel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exel Industries and Interparfums 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 Interparfums SA are associated (or correlated) with Exel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exel Industries has no effect on the direction of Interparfums i.e., Interparfums and Exel Industries go up and down completely randomly.

Pair Corralation between Interparfums and Exel Industries

Assuming the 90 days trading horizon Interparfums SA is expected to generate 1.17 times more return on investment than Exel Industries. However, Interparfums is 1.17 times more volatile than Exel Industries. It trades about 0.13 of its potential returns per unit of risk. Exel Industries is currently generating about 0.02 per unit of risk. If you would invest  3,965  in Interparfums SA on December 1, 2024 and sell it today you would earn a total of  490.00  from holding Interparfums SA or generate 12.36% return on investment over 90 days.

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

Interparfums SA  vs.  Exel Industries

Interparfums SA

Risk-Adjusted Performance

OK

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

Exel Industries

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exel Industries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Exel Industries is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Interparfums and Exel Industries

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

The idea behind Interparfums SA and Exel Industries 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 Commodity Directory module to find actively traded commodities issued by global exchanges.