Correlation Between Catering International and Interparfums

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

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

Diversification Opportunities for Catering International and Interparfums

0.0

Correlation Coefficient

Catering International  Interparfums

Pay attention - limited upside

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

Pair Corralation between Catering International and Interparfums

If you would invest  3,255  in Interparfums SA on April 24, 2025 and sell it today you would earn a total of  133.00  from holding Interparfums SA or generate 4.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Catering International Service  vs.  Interparfums SA

Catering International

Risk-Adjusted Performance

Weak

Over the last 90 days Catering International Services has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Catering International is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Interparfums SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Interparfums SA are ranked lower than 4 (%) 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.

Pair Trading with Catering International and Interparfums

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

The idea behind Catering International Services and Interparfums 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.