Correlation Between Capri Holdings and Ambea AB
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Ambea AB 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 Ambea AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Ambea AB, you can compare the effects of market volatilities on Capri Holdings and Ambea AB 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 Ambea AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Ambea AB.
Diversification Opportunities for Capri Holdings and Ambea AB
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capri and Ambea is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Ambea AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambea AB 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 Ambea AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambea AB has no effect on the direction of Capri Holdings i.e., Capri Holdings and Ambea AB go up and down completely randomly.
Pair Corralation between Capri Holdings and Ambea AB
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Ambea AB. In addition to that, Capri Holdings is 4.43 times more volatile than Ambea AB. It trades about -0.12 of its total potential returns per unit of risk. Ambea AB is currently generating about 0.07 per unit of volatility. If you would invest 9,000 in Ambea AB on August 29, 2024 and sell it today you would earn a total of 400.00 from holding Ambea AB or generate 4.44% 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. Ambea AB
Performance |
| Timeline |
| Capri Holdings |
| Ambea AB |
Capri Holdings and Ambea AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Ambea AB
The main advantage of trading using opposite Capri Holdings and Ambea AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Ambea AB 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 Ambea AB will offset losses from the drop in Ambea AB'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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