Correlation Between Capri Holdings and Bd Multimedia
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Bd Multimedia 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 Bd Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Bd Multimedia, you can compare the effects of market volatilities on Capri Holdings and Bd Multimedia 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 Bd Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Bd Multimedia.
Diversification Opportunities for Capri Holdings and Bd Multimedia
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Capri and ALBDM is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Bd Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bd Multimedia 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 Bd Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bd Multimedia has no effect on the direction of Capri Holdings i.e., Capri Holdings and Bd Multimedia go up and down completely randomly.
Pair Corralation between Capri Holdings and Bd Multimedia
Given the investment horizon of 90 days Capri Holdings is expected to generate 0.91 times more return on investment than Bd Multimedia. However, Capri Holdings is 1.09 times less risky than Bd Multimedia. It trades about -0.03 of its potential returns per unit of risk. Bd Multimedia is currently generating about -0.06 per unit of risk. If you would invest 3,441 in Capri Holdings on September 1, 2024 and sell it today you would lose (1,100) from holding Capri Holdings or give up 31.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.92% |
| Values | Daily Returns |
Capri Holdings vs. Bd Multimedia
Performance |
| Timeline |
| Capri Holdings |
| Bd Multimedia |
Capri Holdings and Bd Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Bd Multimedia
The main advantage of trading using opposite Capri Holdings and Bd Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Bd Multimedia 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 Bd Multimedia will offset losses from the drop in Bd Multimedia's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Bd Multimedia vs. Chargeurs SA | Bd Multimedia vs. Straumann Holding AG | Bd Multimedia vs. Manitou BF SA | Bd Multimedia vs. Amundi Index Solutions |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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