Correlation Between Remy Cointreau and Interparfums

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

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

Diversification Opportunities for Remy Cointreau and Interparfums

-0.44

Correlation Coefficient

Remy Cointreau  Interparfums

Very good diversification

The 3 months correlation between Remy and Interparfums is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Remy Cointreau and Interparfums SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interparfums SA and Remy Cointreau 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 Remy Cointreau are associated (or correlated) with Interparfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interparfums SA has no effect on the direction of Remy Cointreau i.e., Remy Cointreau and Interparfums go up and down completely randomly.

Pair Corralation between Remy Cointreau and Interparfums

Assuming the 90 days trading horizon Remy Cointreau is expected to under-perform the Interparfums. In addition to that, Remy Cointreau is 1.53 times more volatile than Interparfums SA. It trades about -0.1 of its total potential returns per unit of risk. Interparfums SA is currently generating about 0.13 per unit of volatility. 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Remy Cointreau  vs.  Interparfums SA

Remy Cointreau

Risk-Adjusted Performance

Very Weak

Over the last 90 days Remy Cointreau has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with Remy Cointreau and Interparfums

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

The idea behind Remy Cointreau and Interparfums SA 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.