Correlation Between Capri Holdings and Aggressive Investors
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Aggressive Investors 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 Aggressive Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Aggressive Investors 1, you can compare the effects of market volatilities on Capri Holdings and Aggressive Investors 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 Aggressive Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Aggressive Investors.
Diversification Opportunities for Capri Holdings and Aggressive Investors
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and Aggressive is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Aggressive Investors 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Investors 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 Aggressive Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Investors has no effect on the direction of Capri Holdings i.e., Capri Holdings and Aggressive Investors go up and down completely randomly.
Pair Corralation between Capri Holdings and Aggressive Investors
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Aggressive Investors. In addition to that, Capri Holdings is 2.9 times more volatile than Aggressive Investors 1. It trades about -0.26 of its total potential returns per unit of risk. Aggressive Investors 1 is currently generating about -0.02 per unit of volatility. If you would invest 9,985 in Aggressive Investors 1 on November 27, 2024 and sell it today you would lose (49.00) from holding Aggressive Investors 1 or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Aggressive Investors 1
Performance |
| Timeline |
| Capri Holdings |
| Aggressive Investors |
Capri Holdings and Aggressive Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Aggressive Investors
The main advantage of trading using opposite Capri Holdings and Aggressive Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Aggressive Investors 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 Aggressive Investors will offset losses from the drop in Aggressive Investors' long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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