Correlation Between Capri Holdings and Cathay TAIEX
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Cathay TAIEX 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 Capri Holdings and Cathay TAIEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Cathay TAIEX Daily, you can compare the effects of market volatilities on Capri Holdings and Cathay TAIEX 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 Capri Holdings with a short position of Cathay TAIEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Cathay TAIEX.
Diversification Opportunities for Capri Holdings and Cathay TAIEX
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and Cathay is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Cathay TAIEX Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay TAIEX Daily and Capri Holdings 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 Capri Holdings are associated (or correlated) with Cathay TAIEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay TAIEX Daily has no effect on the direction of Capri Holdings i.e., Capri Holdings and Cathay TAIEX go up and down completely randomly.
Pair Corralation between Capri Holdings and Cathay TAIEX
Given the investment horizon of 90 days Capri Holdings is expected to generate 3.46 times more return on investment than Cathay TAIEX. However, Capri Holdings is 3.46 times more volatile than Cathay TAIEX Daily. It trades about -0.02 of its potential returns per unit of risk. Cathay TAIEX Daily is currently generating about -0.09 per unit of risk. If you would invest 4,357 in Capri Holdings on November 27, 2024 and sell it today you would lose (2,227) from holding Capri Holdings or give up 51.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.3% |
| Values | Daily Returns |
Capri Holdings vs. Cathay TAIEX Daily
Performance |
| Timeline |
| Capri Holdings |
| Cathay TAIEX Daily |
Capri Holdings and Cathay TAIEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Cathay TAIEX
The main advantage of trading using opposite Capri Holdings and Cathay TAIEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Cathay TAIEX 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 Cathay TAIEX will offset losses from the drop in Cathay TAIEX's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Cathay TAIEX vs. Cathay TIP TAIEX | Cathay TAIEX vs. Cathay Nasdaq AI | Cathay TAIEX vs. Cathay Dow Jones | Cathay TAIEX vs. Cathay Bloomberg Barclays |
Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |