Correlation Between John B and Inter Parfums

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

By analyzing existing cross correlation between John B Sanfilippo and Inter Parfums, you can compare the effects of market volatilities on John B and Inter Parfums 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 John B with a short position of Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Inter Parfums.

Diversification Opportunities for John B and Inter Parfums

0.27

Correlation Coefficient

John B  Inter Parfums

Modest diversification

The 3 months correlation between John and Inter is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums and John B 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 John B Sanfilippo are associated (or correlated) with Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of John B i.e., John B and Inter Parfums go up and down completely randomly.

Pair Corralation between John B and Inter Parfums

Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the Inter Parfums. In addition to that, John B is 1.04 times more volatile than Inter Parfums. It trades about -0.15 of its total potential returns per unit of risk. Inter Parfums is currently generating about -0.04 per unit of volatility. If you would invest  12,976  in Inter Parfums on December 28, 2024 and sell it today you would lose (827.00) from holding Inter Parfums or give up 6.37% of portfolio value over 90 days.

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

John B Sanfilippo  vs.  Inter Parfums

John B Sanfilippo

Risk-Adjusted Performance

Very Weak

Over the last 90 days John B Sanfilippo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 relatively invariable basic indicators, Inter Parfums is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with John B and Inter Parfums

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

The idea behind John B Sanfilippo and Inter Parfums 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.