Correlation Between Capri Holdings and Alger Capital
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Alger Capital 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 Alger Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Alger Capital Appreciation, you can compare the effects of market volatilities on Capri Holdings and Alger Capital 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 Alger Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Alger Capital.
Diversification Opportunities for Capri Holdings and Alger Capital
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capri and Alger is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Alger Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Capital Apprec 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 Alger Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Capital Apprec has no effect on the direction of Capri Holdings i.e., Capri Holdings and Alger Capital go up and down completely randomly.
Pair Corralation between Capri Holdings and Alger Capital
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Alger Capital. In addition to that, Capri Holdings is 2.51 times more volatile than Alger Capital Appreciation. It trades about -0.06 of its total potential returns per unit of risk. Alger Capital Appreciation is currently generating about 0.1 per unit of volatility. If you would invest 3,446 in Alger Capital Appreciation on August 29, 2024 and sell it today you would earn a total of 1,684 from holding Alger Capital Appreciation or generate 48.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Alger Capital Appreciation
Performance |
| Timeline |
| Capri Holdings |
| Alger Capital Apprec |
Capri Holdings and Alger Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Alger Capital
The main advantage of trading using opposite Capri Holdings and Alger Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Alger Capital 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 Alger Capital will offset losses from the drop in Alger Capital's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Alger Capital vs. Dodge Cox Stock | Alger Capital vs. Dunham Large Cap | Alger Capital vs. Pace Large Value | Alger Capital vs. Transamerica Large Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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