Correlation Between Interparfums and Catering International

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

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

Diversification Opportunities for Interparfums and Catering International

0.27

Correlation Coefficient

Interparfums  Catering International

Modest diversification

The 3 months correlation between Interparfums and Catering is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Interparfums SA and Catering International Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catering International 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 Catering International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catering International has no effect on the direction of Interparfums i.e., Interparfums and Catering International go up and down completely randomly.

Pair Corralation between Interparfums and Catering International

Assuming the 90 days trading horizon Interparfums SA is expected to generate 1.2 times more return on investment than Catering International. However, Interparfums is 1.2 times more volatile than Catering International Services. It trades about 0.1 of its potential returns per unit of risk. Catering International Services is currently generating about 0.02 per unit of risk. If you would invest  3,213  in Interparfums SA on April 25, 2025 and sell it today you would earn a total of  291.00  from holding Interparfums SA or generate 9.06% return on investment over 90 days.

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

Interparfums SA  vs.  Catering International Service

Interparfums SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Interparfums SA are ranked lower than 7 (%) 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.

Catering International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Catering International Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Catering International is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Interparfums and Catering International

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

The idea behind Interparfums SA and Catering International Services 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.