Correlation Between Capri Holdings and American Beacon
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and American Beacon 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 American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and American Beacon Bridgeway, you can compare the effects of market volatilities on Capri Holdings and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and American Beacon.
Diversification Opportunities for Capri Holdings and American Beacon
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and American is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and American Beacon Bridgeway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Bridgeway 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Bridgeway has no effect on the direction of Capri Holdings i.e., Capri Holdings and American Beacon go up and down completely randomly.
Pair Corralation between Capri Holdings and American Beacon
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the American Beacon. In addition to that, Capri Holdings is 3.94 times more volatile than American Beacon Bridgeway. It trades about -0.26 of its total potential returns per unit of risk. American Beacon Bridgeway is currently generating about -0.04 per unit of volatility. If you would invest 3,275 in American Beacon Bridgeway on November 27, 2024 and sell it today you would lose (21.00) from holding American Beacon Bridgeway or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. American Beacon Bridgeway
Performance |
| Timeline |
| Capri Holdings |
| American Beacon Bridgeway |
Capri Holdings and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and American Beacon
The main advantage of trading using opposite Capri Holdings and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| American Beacon vs. American Beacon Bridgeway | American Beacon vs. Disciplined Growth Fund | American Beacon vs. Select Fund R | American Beacon vs. Select Fund C |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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