Correlation Between Capri Holdings and APS Energia
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and APS Energia 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 APS Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and APS Energia SA, you can compare the effects of market volatilities on Capri Holdings and APS Energia 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 APS Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and APS Energia.
Diversification Opportunities for Capri Holdings and APS Energia
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capri and APS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and APS Energia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Energia 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 APS Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Energia SA has no effect on the direction of Capri Holdings i.e., Capri Holdings and APS Energia go up and down completely randomly.
Pair Corralation between Capri Holdings and APS Energia
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the APS Energia. In addition to that, Capri Holdings is 1.03 times more volatile than APS Energia SA. It trades about -0.02 of its total potential returns per unit of risk. APS Energia SA is currently generating about 0.01 per unit of volatility. If you would invest 325.00 in APS Energia SA on August 30, 2024 and sell it today you would lose (55.00) from holding APS Energia SA or give up 16.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Capri Holdings vs. APS Energia SA
Performance |
| Timeline |
| Capri Holdings |
| APS Energia SA |
Capri Holdings and APS Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and APS Energia
The main advantage of trading using opposite Capri Holdings and APS Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, APS Energia 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 APS Energia will offset losses from the drop in APS Energia's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| APS Energia vs. Asseco Business Solutions | APS Energia vs. Detalion Games SA | APS Energia vs. Asseco South Eastern | APS Energia vs. Vercom SA |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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