Correlation Between Capri Holdings and Delfingen
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Delfingen 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 Delfingen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Delfingen, you can compare the effects of market volatilities on Capri Holdings and Delfingen 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 Delfingen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Delfingen.
Diversification Opportunities for Capri Holdings and Delfingen
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and Delfingen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Delfingen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delfingen 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 Delfingen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delfingen has no effect on the direction of Capri Holdings i.e., Capri Holdings and Delfingen go up and down completely randomly.
Pair Corralation between Capri Holdings and Delfingen
Given the investment horizon of 90 days Capri Holdings is expected to generate 2.03 times more return on investment than Delfingen. However, Capri Holdings is 2.03 times more volatile than Delfingen. It trades about 0.1 of its potential returns per unit of risk. Delfingen is currently generating about -0.54 per unit of risk. If you would invest 2,139 in Capri Holdings on August 29, 2024 and sell it today you would earn a total of 145.00 from holding Capri Holdings or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Delfingen
Performance |
| Timeline |
| Capri Holdings |
| Delfingen |
Capri Holdings and Delfingen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Delfingen
The main advantage of trading using opposite Capri Holdings and Delfingen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Delfingen 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 Delfingen will offset losses from the drop in Delfingen's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Delfingen vs. Akwel SA | Delfingen vs. Groupe Guillin SA | Delfingen vs. Burelle SA | Delfingen vs. SA Catana Group |
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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