Correlation Between Vergnet and Interparfums

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

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

Diversification Opportunities for Vergnet and Interparfums

-0.23

Correlation Coefficient

Vergnet  Interparfums

Very good diversification

The 3 months correlation between Vergnet and Interparfums is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Vergnet and Interparfums SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interparfums SA and Vergnet 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 Vergnet 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 Vergnet i.e., Vergnet and Interparfums go up and down completely randomly.

Pair Corralation between Vergnet and Interparfums

Assuming the 90 days trading horizon Vergnet is expected to generate 7.25 times more return on investment than Interparfums. However, Vergnet is 7.25 times more volatile than Interparfums SA. It trades about 0.03 of its potential returns per unit of risk. Interparfums SA is currently generating about 0.11 per unit of risk. If you would invest  0.07  in Vergnet on April 20, 2025 and sell it today you would lose (0.01) from holding Vergnet or give up 14.29% of portfolio value over 90 days.

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

Vergnet  vs.  Interparfums SA

Vergnet

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vergnet are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Vergnet reported solid returns over the last few months and may actually be approaching a breakup point.

Interparfums SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Interparfums SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Interparfums may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vergnet and Interparfums

The main advantage of trading using opposite Vergnet and Interparfums positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vergnet 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 Vergnet 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.