Correlation Between Capri Holdings and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Dodge Cox 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 Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Dodge Cox Emerging, you can compare the effects of market volatilities on Capri Holdings and Dodge Cox 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 Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Dodge Cox.
Diversification Opportunities for Capri Holdings and Dodge Cox
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capri and Dodge is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Dodge Cox Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Emerging 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 Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox Emerging has no effect on the direction of Capri Holdings i.e., Capri Holdings and Dodge Cox go up and down completely randomly.
Pair Corralation between Capri Holdings and Dodge Cox
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Dodge Cox. In addition to that, Capri Holdings is 5.48 times more volatile than Dodge Cox Emerging. It trades about -0.03 of its total potential returns per unit of risk. Dodge Cox Emerging is currently generating about 0.02 per unit of volatility. If you would invest 889.00 in Dodge Cox Emerging on September 1, 2024 and sell it today you would earn a total of 11.00 from holding Dodge Cox Emerging or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Capri Holdings vs. Dodge Cox Emerging
Performance |
| Timeline |
| Capri Holdings |
| Dodge Cox Emerging |
Capri Holdings and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Dodge Cox
The main advantage of trading using opposite Capri Holdings and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Dodge Cox vs. Adams Diversified Equity | Dodge Cox vs. Delaware Limited Term Diversified | Dodge Cox vs. Fidelity Advisor Diversified | Dodge Cox vs. American Century Diversified |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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