Correlation Between Yoshitsu and Inter Parfums

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

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

Diversification Opportunities for Yoshitsu and Inter Parfums

0.15

Correlation Coefficient

Yoshitsu  Inter Parfums

Average diversification

The 3 months correlation between Yoshitsu and Inter is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Yoshitsu Co Ltd and Inter Parfums in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Parfums and Yoshitsu 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 Yoshitsu Co Ltd are associated (or correlated) with Inter Parfums. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Parfums has no effect on the direction of Yoshitsu i.e., Yoshitsu and Inter Parfums go up and down completely randomly.

Pair Corralation between Yoshitsu and Inter Parfums

Given the investment horizon of 90 days Yoshitsu Co Ltd is expected to under-perform the Inter Parfums. In addition to that, Yoshitsu is 4.7 times more volatile than Inter Parfums. It trades about -0.14 of its total potential returns per unit of risk. Inter Parfums is currently generating about 0.08 per unit of volatility. If you would invest  12,299  in Inter Parfums on August 10, 2024 and sell it today you would earn a total of  289.00  from holding Inter Parfums or generate 2.35% return on investment over 90 days.

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

Yoshitsu Co Ltd  vs.  Inter Parfums

Yoshitsu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yoshitsu Co Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Inter Parfums

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Yoshitsu and Inter Parfums

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

The idea behind Yoshitsu Co Ltd and Inter Parfums 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..