Correlation Between Capri Holdings and GrafTech International
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and GrafTech International 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 GrafTech International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and GrafTech International, you can compare the effects of market volatilities on Capri Holdings and GrafTech International 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 GrafTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and GrafTech International.
Diversification Opportunities for Capri Holdings and GrafTech International
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capri and GrafTech is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International 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 GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of Capri Holdings i.e., Capri Holdings and GrafTech International go up and down completely randomly.
Pair Corralation between Capri Holdings and GrafTech International
Given the investment horizon of 90 days Capri Holdings is expected to generate 0.45 times more return on investment than GrafTech International. However, Capri Holdings is 2.21 times less risky than GrafTech International. It trades about -0.23 of its potential returns per unit of risk. GrafTech International is currently generating about -0.16 per unit of risk. If you would invest 2,534 in Capri Holdings on November 28, 2024 and sell it today you would lose (422.00) from holding Capri Holdings or give up 16.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. GrafTech International
Performance |
| Timeline |
| Capri Holdings |
| GrafTech International |
Capri Holdings and GrafTech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and GrafTech International
The main advantage of trading using opposite Capri Holdings and GrafTech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, GrafTech International 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 GrafTech International will offset losses from the drop in GrafTech International's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| GrafTech International vs. Kimball Electronics | GrafTech International vs. Hayward Holdings | GrafTech International vs. Enersys | GrafTech International vs. Espey Mfg Electronics |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |