Correlation Between Interparfums and Marie Brizard

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

By analyzing existing cross correlation between Interparfums SA and Marie Brizard Wine, you can compare the effects of market volatilities on Interparfums and Marie Brizard 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 Marie Brizard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interparfums and Marie Brizard.

Diversification Opportunities for Interparfums and Marie Brizard

-0.14

Correlation Coefficient

Interparfums  Marie Brizard

Good diversification

The 3 months correlation between Interparfums and Marie is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Interparfums SA and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine 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 Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of Interparfums i.e., Interparfums and Marie Brizard go up and down completely randomly.

Pair Corralation between Interparfums and Marie Brizard

Assuming the 90 days trading horizon Interparfums SA is expected to generate 1.12 times more return on investment than Marie Brizard. However, Interparfums is 1.12 times more volatile than Marie Brizard Wine. It trades about 0.02 of its potential returns per unit of risk. Marie Brizard Wine is currently generating about -0.02 per unit of risk. If you would invest  4,070  in Interparfums SA on September 13, 2024 and sell it today you would earn a total of  50.00  from holding Interparfums SA or generate 1.23% return on investment over 90 days.

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

Interparfums SA  vs.  Marie Brizard Wine

Interparfums SA

Risk-Adjusted Performance

1 of 100

Weak

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

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marie Brizard Wine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Marie Brizard 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 Marie Brizard

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

The idea behind Interparfums SA and Marie Brizard Wine 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.