Correlation Between Capri Holdings and 88 Energy
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and 88 Energy 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 88 Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and 88 Energy, you can compare the effects of market volatilities on Capri Holdings and 88 Energy 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 88 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and 88 Energy.
Diversification Opportunities for Capri Holdings and 88 Energy
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and 88E is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and 88 Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 88 Energy 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 88 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 88 Energy has no effect on the direction of Capri Holdings i.e., Capri Holdings and 88 Energy go up and down completely randomly.
Pair Corralation between Capri Holdings and 88 Energy
Given the investment horizon of 90 days Capri Holdings is expected to generate 1.74 times more return on investment than 88 Energy. However, Capri Holdings is 1.74 times more volatile than 88 Energy. It trades about 0.19 of its potential returns per unit of risk. 88 Energy is currently generating about -0.11 per unit of risk. If you would invest 2,048 in Capri Holdings on August 30, 2024 and sell it today you would earn a total of 304.00 from holding Capri Holdings or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Capri Holdings vs. 88 Energy
Performance |
| Timeline |
| Capri Holdings |
| 88 Energy |
Capri Holdings and 88 Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and 88 Energy
The main advantage of trading using opposite Capri Holdings and 88 Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, 88 Energy 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 88 Energy will offset losses from the drop in 88 Energy's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| 88 Energy vs. Extra Space Storage | 88 Energy vs. Elmos Semiconductor SE | 88 Energy vs. Teradata Corp | 88 Energy vs. Fidelity National Information |
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.
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