Correlation Between Capri Holdings and Indo Kordsa
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Indo Kordsa 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 Indo Kordsa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Indo Kordsa Tbk, you can compare the effects of market volatilities on Capri Holdings and Indo Kordsa 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 Indo Kordsa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Indo Kordsa.
Diversification Opportunities for Capri Holdings and Indo Kordsa
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capri and Indo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Indo Kordsa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Kordsa Tbk 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 Indo Kordsa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Kordsa Tbk has no effect on the direction of Capri Holdings i.e., Capri Holdings and Indo Kordsa go up and down completely randomly.
Pair Corralation between Capri Holdings and Indo Kordsa
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Indo Kordsa. In addition to that, Capri Holdings is 3.01 times more volatile than Indo Kordsa Tbk. It trades about -0.26 of its total potential returns per unit of risk. Indo Kordsa Tbk is currently generating about -0.04 per unit of volatility. If you would invest 585,000 in Indo Kordsa Tbk on November 27, 2024 and sell it today you would lose (5,000) from holding Indo Kordsa Tbk or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Capri Holdings vs. Indo Kordsa Tbk
Performance |
| Timeline |
| Capri Holdings |
| Indo Kordsa Tbk |
Capri Holdings and Indo Kordsa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Indo Kordsa
The main advantage of trading using opposite Capri Holdings and Indo Kordsa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Indo Kordsa 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 Indo Kordsa will offset losses from the drop in Indo Kordsa's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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