Correlation Between Inter Parfums and PriceSmart

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

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

Diversification Opportunities for Inter Parfums and PriceSmart

-0.54

Correlation Coefficient

Inter Parfums  PriceSmart

Excellent diversification

The 3 months correlation between Inter and PriceSmart is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and PriceSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PriceSmart 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 PriceSmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PriceSmart has no effect on the direction of Inter Parfums i.e., Inter Parfums and PriceSmart go up and down completely randomly.

Pair Corralation between Inter Parfums and PriceSmart

Given the investment horizon of 90 days Inter Parfums is expected to under-perform the PriceSmart. In addition to that, Inter Parfums is 1.12 times more volatile than PriceSmart. It trades about -0.28 of its total potential returns per unit of risk. PriceSmart is currently generating about 0.08 per unit of volatility. If you would invest  10,875  in PriceSmart on August 26, 2025 and sell it today you would earn a total of  882.00  from holding PriceSmart or generate 8.11% return on investment over 90 days.

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

Inter Parfums  vs.  PriceSmart

Inter Parfums

Risk-Adjusted Performance

Weakest

Over the last 90 days Inter Parfums has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

PriceSmart

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in PriceSmart are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, PriceSmart may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Inter Parfums and PriceSmart

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

The idea behind Inter Parfums and PriceSmart 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.