Correlation Between Interparfums and Jacques Bogart

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

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

Diversification Opportunities for Interparfums and Jacques Bogart

0.59

Correlation Coefficient

Interparfums  Jacques Bogart

Very weak diversification

The 3 months correlation between Interparfums and Jacques is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Interparfums SA and Jacques Bogart SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacques Bogart SA and Interparfums 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 Interparfums SA are associated (or correlated) with Jacques Bogart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacques Bogart SA has no effect on the direction of Interparfums i.e., Interparfums and Jacques Bogart go up and down completely randomly.

Pair Corralation between Interparfums and Jacques Bogart

Assuming the 90 days trading horizon Interparfums SA is expected to generate 0.67 times more return on investment than Jacques Bogart. However, Interparfums SA is 1.48 times less risky than Jacques Bogart. It trades about 0.19 of its potential returns per unit of risk. Jacques Bogart SA is currently generating about 0.09 per unit of risk. If you would invest  3,930  in Interparfums SA on September 13, 2024 and sell it today you would earn a total of  190.00  from holding Interparfums SA or generate 4.83% return on investment over 90 days.

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

Interparfums SA  vs.  Jacques Bogart SA

Interparfums SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Interparfums SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Interparfums is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jacques Bogart SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jacques Bogart SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jacques Bogart is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Interparfums and Jacques Bogart

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

The idea behind Interparfums SA and Jacques Bogart 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.