Correlation Between Inter Parfums and MEDIFAST INC

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

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

Diversification Opportunities for Inter Parfums and MEDIFAST INC

0.3

Correlation Coefficient

Inter Parfums  MEDIFAST INC

Weak diversification

The 3 months correlation between Inter and MEDIFAST is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Inter Parfums and MEDIFAST INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIFAST INC 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 MEDIFAST INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIFAST INC has no effect on the direction of Inter Parfums i.e., Inter Parfums and MEDIFAST INC go up and down completely randomly.

Pair Corralation between Inter Parfums and MEDIFAST INC

Given the investment horizon of 90 days Inter Parfums is expected to generate 0.68 times more return on investment than MEDIFAST INC. However, Inter Parfums is 1.47 times less risky than MEDIFAST INC. It trades about 0.07 of its potential returns per unit of risk. MEDIFAST INC is currently generating about 0.04 per unit of risk. If you would invest  10,975  in Inter Parfums on May 5, 2025 and sell it today you would earn a total of  857.00  from holding Inter Parfums or generate 7.81% return on investment over 90 days.

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

Inter Parfums  vs.  MEDIFAST INC

Inter Parfums

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Parfums are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Inter Parfums may actually be approaching a critical reversion point that can send shares even higher in September 2025.

MEDIFAST INC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MEDIFAST INC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, MEDIFAST INC may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Inter Parfums and MEDIFAST INC

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

The idea behind Inter Parfums and MEDIFAST INC 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.