Correlation Between Inter Parfums and Hf Foods

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

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

Diversification Opportunities for Inter Parfums and Hf Foods

0.63

Correlation Coefficient

Inter Parfums  Hf Foods

Poor diversification

The 3 months correlation between Inter and HFFG is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and Hf Foods Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hf Foods Group and Inter Parfums 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 Inter Parfums are associated (or correlated) with Hf Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hf Foods Group has no effect on the direction of Inter Parfums i.e., Inter Parfums and Hf Foods go up and down completely randomly.

Pair Corralation between Inter Parfums and Hf Foods

Given the investment horizon of 90 days Inter Parfums is expected to generate 0.49 times more return on investment than Hf Foods. However, Inter Parfums is 2.04 times less risky than Hf Foods. It trades about 0.05 of its potential returns per unit of risk. Hf Foods Group is currently generating about 0.0 per unit of risk. If you would invest  11,757  in Inter Parfums on September 28, 2024 and sell it today you would earn a total of  1,349  from holding Inter Parfums or generate 11.47% return on investment over 90 days.

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

Inter Parfums  vs.  Hf Foods Group

Inter Parfums

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Hf Foods Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hf Foods Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Inter Parfums and Hf Foods

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

The idea behind Inter Parfums and Hf Foods Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.