Correlation Between Capri Holdings and BP Prudhoe
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and BP Prudhoe 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 BP Prudhoe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and BP Prudhoe Bay, you can compare the effects of market volatilities on Capri Holdings and BP Prudhoe 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 BP Prudhoe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and BP Prudhoe.
Diversification Opportunities for Capri Holdings and BP Prudhoe
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capri and BMI is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and BP Prudhoe Bay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP Prudhoe Bay 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 BP Prudhoe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP Prudhoe Bay has no effect on the direction of Capri Holdings i.e., Capri Holdings and BP Prudhoe go up and down completely randomly.
Pair Corralation between Capri Holdings and BP Prudhoe
Given the investment horizon of 90 days Capri Holdings is expected to generate 0.71 times more return on investment than BP Prudhoe. However, Capri Holdings is 1.4 times less risky than BP Prudhoe. It trades about -0.06 of its potential returns per unit of risk. BP Prudhoe Bay is currently generating about -0.08 per unit of risk. If you would invest 5,066 in Capri Holdings on September 1, 2024 and sell it today you would lose (2,725) from holding Capri Holdings or give up 53.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.82% |
| Values | Daily Returns |
Capri Holdings vs. BP Prudhoe Bay
Performance |
| Timeline |
| Capri Holdings |
| BP Prudhoe Bay |
Capri Holdings and BP Prudhoe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and BP Prudhoe
The main advantage of trading using opposite Capri Holdings and BP Prudhoe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, BP Prudhoe 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 BP Prudhoe will offset losses from the drop in BP Prudhoe's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| BP Prudhoe vs. Superior Plus Corp | BP Prudhoe vs. NMI Holdings | BP Prudhoe vs. Origin Agritech | BP Prudhoe vs. SIVERS SEMICONDUCTORS AB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |