Correlation Between Capri Holdings and Bang Olufsen
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Bang Olufsen 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 Bang Olufsen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Bang Olufsen, you can compare the effects of market volatilities on Capri Holdings and Bang Olufsen 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 Bang Olufsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Bang Olufsen.
Diversification Opportunities for Capri Holdings and Bang Olufsen
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and Bang is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Bang Olufsen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bang Olufsen 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 Bang Olufsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bang Olufsen has no effect on the direction of Capri Holdings i.e., Capri Holdings and Bang Olufsen go up and down completely randomly.
Pair Corralation between Capri Holdings and Bang Olufsen
Given the investment horizon of 90 days Capri Holdings is expected to generate 2.83 times more return on investment than Bang Olufsen. However, Capri Holdings is 2.83 times more volatile than Bang Olufsen. It trades about 0.1 of its potential returns per unit of risk. Bang Olufsen is currently generating about 0.09 per unit of risk. If you would invest 2,139 in Capri Holdings on August 29, 2024 and sell it today you would earn a total of 145.00 from holding Capri Holdings or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Bang Olufsen
Performance |
| Timeline |
| Capri Holdings |
| Bang Olufsen |
Capri Holdings and Bang Olufsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Bang Olufsen
The main advantage of trading using opposite Capri Holdings and Bang Olufsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Bang Olufsen 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 Bang Olufsen will offset losses from the drop in Bang Olufsen's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Bang Olufsen vs. FLSmidth Co | Bang Olufsen vs. Ambu AS | Bang Olufsen vs. GN Store Nord | Bang Olufsen vs. ISS AS |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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