Correlation Between Inter Parfums and Rent A

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

By analyzing existing cross correlation between Inter Parfums and Rent A Center, you can compare the effects of market volatilities on Inter Parfums and Rent A 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 Rent A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Parfums and Rent A.

Diversification Opportunities for Inter Parfums and Rent A

0.0

Correlation Coefficient

Inter Parfums  Rent A

Pay attention - limited upside

The 3 months correlation between Inter and Rent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and Rent A Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rent A Center 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 Rent A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rent A Center has no effect on the direction of Inter Parfums i.e., Inter Parfums and Rent A go up and down completely randomly.

Pair Corralation between Inter Parfums and Rent A

If you would invest  11,505  in Inter Parfums on September 12, 2024 and sell it today you would earn a total of  2,310  from holding Inter Parfums or generate 20.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Inter Parfums  vs.  Rent A Center

Inter Parfums

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Inter Parfums reported solid returns over the last few months and may actually be approaching a breakup point.

Rent A Center

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rent A Center has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Rent A is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Inter Parfums and Rent A

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

The idea behind Inter Parfums and Rent A Center 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.