Correlation Between Stephan and Inter Parfums

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Stephan 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 Stephan and Inter Parfums into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Stephan Co and Inter Parfums, you can compare the effects of market volatilities on Stephan 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 Stephan with a short position of Inter Parfums. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stephan and Inter Parfums.

Diversification Opportunities for Stephan and Inter Parfums

StephanInterDiversified AwayStephanInterDiversified Away100%
0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Stephan and Inter is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Stephan Co and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums and Stephan 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 The Stephan Co 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 Stephan i.e., Stephan and Inter Parfums go up and down completely randomly.

Pair Corralation between Stephan and Inter Parfums

If you would invest  11,913  in Inter Parfums on September 16, 2024 and sell it today you would earn a total of  1,771  from holding Inter Parfums or generate 14.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy1.54%
ValuesDaily Returns

The Stephan Co  vs.  Inter Parfums

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 5101520
JavaScript chart by amCharts 3.21.15SPCO IPAR
       Timeline  
The Stephan 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days The Stephan Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Stephan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Inter Parfums 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Inter Parfums reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec120125130135140

Stephan and Inter Parfums Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.45-8.57-5.7-2.830.02.665.378.0810.79 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15SPCO IPAR
       Returns  

Pair Trading with Stephan and Inter Parfums

The main advantage of trading using opposite Stephan and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stephan 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 The Stephan Co 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.
Check out your portfolio center.
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk