Correlation Between Capri Holdings and Groupimo
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Groupimo 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 Groupimo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Groupimo SA, you can compare the effects of market volatilities on Capri Holdings and Groupimo 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 Groupimo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Groupimo.
Diversification Opportunities for Capri Holdings and Groupimo
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and Groupimo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Groupimo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupimo SA 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 Groupimo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupimo SA has no effect on the direction of Capri Holdings i.e., Capri Holdings and Groupimo go up and down completely randomly.
Pair Corralation between Capri Holdings and Groupimo
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Groupimo. In addition to that, Capri Holdings is 3.06 times more volatile than Groupimo SA. It trades about -0.26 of its total potential returns per unit of risk. Groupimo SA is currently generating about -0.22 per unit of volatility. If you would invest 21.00 in Groupimo SA on November 27, 2024 and sell it today you would lose (1.00) from holding Groupimo SA or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Capri Holdings vs. Groupimo SA
Performance |
| Timeline |
| Capri Holdings |
| Groupimo SA |
Capri Holdings and Groupimo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Groupimo
The main advantage of trading using opposite Capri Holdings and Groupimo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Groupimo 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 Groupimo will offset losses from the drop in Groupimo's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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