Correlation Between Capri Holdings and Showbox Corp
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Showbox Corp 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 Showbox Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Showbox Corp, you can compare the effects of market volatilities on Capri Holdings and Showbox Corp 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 Showbox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Showbox Corp.
Diversification Opportunities for Capri Holdings and Showbox Corp
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and Showbox is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Showbox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Showbox Corp 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 Showbox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Showbox Corp has no effect on the direction of Capri Holdings i.e., Capri Holdings and Showbox Corp go up and down completely randomly.
Pair Corralation between Capri Holdings and Showbox Corp
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Showbox Corp. In addition to that, Capri Holdings is 1.43 times more volatile than Showbox Corp. It trades about -0.02 of its total potential returns per unit of risk. Showbox Corp is currently generating about 0.01 per unit of volatility. If you would invest 343,500 in Showbox Corp on November 27, 2024 and sell it today you would lose (11,500) from holding Showbox Corp or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.24% |
| Values | Daily Returns |
Capri Holdings vs. Showbox Corp
Performance |
| Timeline |
| Capri Holdings |
| Showbox Corp |
Capri Holdings and Showbox Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Showbox Corp
The main advantage of trading using opposite Capri Holdings and Showbox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Showbox Corp 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 Showbox Corp will offset losses from the drop in Showbox Corp's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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