Correlation Between Capri Holdings and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Ascot Resources 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 Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Ascot Resources, you can compare the effects of market volatilities on Capri Holdings and Ascot Resources 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 Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Ascot Resources.
Diversification Opportunities for Capri Holdings and Ascot Resources
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capri and Ascot is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources 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 Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Capri Holdings i.e., Capri Holdings and Ascot Resources go up and down completely randomly.
Pair Corralation between Capri Holdings and Ascot Resources
Given the investment horizon of 90 days Capri Holdings is expected to generate 0.36 times more return on investment than Ascot Resources. However, Capri Holdings is 2.77 times less risky than Ascot Resources. It trades about -0.26 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.32 per unit of risk. If you would invest 2,534 in Capri Holdings on November 27, 2024 and sell it today you would lose (404.00) from holding Capri Holdings or give up 15.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Ascot Resources
Performance |
| Timeline |
| Capri Holdings |
| Ascot Resources |
Capri Holdings and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Ascot Resources
The main advantage of trading using opposite Capri Holdings and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Ascot Resources 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Ascot Resources vs. First National Financial | Ascot Resources vs. Calian Technologies | Ascot Resources vs. Canso Credit Trust | Ascot Resources vs. BLUERUSH Media 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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