Correlation Between Usio and Inter Parfums

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

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

Diversification Opportunities for Usio and Inter Parfums

0.27

Correlation Coefficient

Usio  Inter Parfums

Modest diversification

The 3 months correlation between Usio and Inter is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Usio Inc and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums and Usio 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 Usio Inc 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 Usio i.e., Usio and Inter Parfums go up and down completely randomly.

Pair Corralation between Usio and Inter Parfums

Given the investment horizon of 90 days Usio Inc is expected to under-perform the Inter Parfums. In addition to that, Usio is 1.93 times more volatile than Inter Parfums. It trades about -0.22 of its total potential returns per unit of risk. Inter Parfums is currently generating about -0.02 per unit of volatility. If you would invest  14,102  in Inter Parfums on December 2, 2024 and sell it today you would lose (210.00) from holding Inter Parfums or give up 1.49% of portfolio value over 90 days.

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

Usio Inc  vs.  Inter Parfums

Usio Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Usio Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Usio displayed solid returns over the last few months and may actually be approaching a breakup point.

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 Usio and Inter Parfums

The main advantage of trading using opposite Usio and Inter Parfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usio 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 Usio Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.