Correlation Between Capri Holdings and Black Box
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Black Box 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 Black Box into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Black Box Limited, you can compare the effects of market volatilities on Capri Holdings and Black Box 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 Black Box. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Black Box.
Diversification Opportunities for Capri Holdings and Black Box
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and Black is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Black Box Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Box Limited 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 Black Box. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Box Limited has no effect on the direction of Capri Holdings i.e., Capri Holdings and Black Box go up and down completely randomly.
Pair Corralation between Capri Holdings and Black Box
Given the investment horizon of 90 days Capri Holdings is expected to generate 1.28 times more return on investment than Black Box. However, Capri Holdings is 1.28 times more volatile than Black Box Limited. It trades about -0.23 of its potential returns per unit of risk. Black Box Limited is currently generating about -0.65 per unit of risk. If you would invest 2,534 in Capri Holdings on November 28, 2024 and sell it today you would lose (422.00) from holding Capri Holdings or give up 16.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Capri Holdings vs. Black Box Limited
Performance |
| Timeline |
| Capri Holdings |
| Black Box Limited |
Capri Holdings and Black Box Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Black Box
The main advantage of trading using opposite Capri Holdings and Black Box positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Black Box 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 Black Box will offset losses from the drop in Black Box's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Black Box vs. Syrma SGS Technology | Black Box vs. Ankit Metal Power | Black Box vs. Le Travenues Technology | Black Box vs. Shivalik Bimetal Controls |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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