Correlation Between Capri Holdings and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and ProShares UltraShort 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 ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and ProShares UltraShort Oil, you can compare the effects of market volatilities on Capri Holdings and ProShares UltraShort 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 ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and ProShares UltraShort.
Diversification Opportunities for Capri Holdings and ProShares UltraShort
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and ProShares is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and ProShares UltraShort Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort Oil 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 ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort Oil has no effect on the direction of Capri Holdings i.e., Capri Holdings and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Capri Holdings and ProShares UltraShort
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the ProShares UltraShort. In addition to that, Capri Holdings is 2.14 times more volatile than ProShares UltraShort Oil. It trades about -0.03 of its total potential returns per unit of risk. ProShares UltraShort Oil is currently generating about -0.03 per unit of volatility. If you would invest 3,831 in ProShares UltraShort Oil on September 1, 2024 and sell it today you would lose (426.00) from holding ProShares UltraShort Oil or give up 11.12% 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. ProShares UltraShort Oil
Performance |
| Timeline |
| Capri Holdings |
| ProShares UltraShort Oil |
Capri Holdings and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and ProShares UltraShort
The main advantage of trading using opposite Capri Holdings and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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