Correlation Between Capri Holdings and Enjoy SA
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Enjoy SA 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 Enjoy SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Enjoy SA, you can compare the effects of market volatilities on Capri Holdings and Enjoy SA 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 Enjoy SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Enjoy SA.
Diversification Opportunities for Capri Holdings and Enjoy SA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and Enjoy is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Enjoy SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enjoy SA 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 Enjoy SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enjoy SA has no effect on the direction of Capri Holdings i.e., Capri Holdings and Enjoy SA go up and down completely randomly.
Pair Corralation between Capri Holdings and Enjoy SA
Given the investment horizon of 90 days Capri Holdings is expected to generate 1.35 times more return on investment than Enjoy SA. However, Capri Holdings is 1.35 times more volatile than Enjoy SA. It trades about -0.03 of its potential returns per unit of risk. Enjoy SA is currently generating about -0.12 per unit of risk. If you would invest 3,441 in Capri Holdings on September 1, 2024 and sell it today you would lose (1,100) from holding Capri Holdings or give up 31.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Capri Holdings vs. Enjoy SA
Performance |
| Timeline |
| Capri Holdings |
| Enjoy SA |
Capri Holdings and Enjoy SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Enjoy SA
The main advantage of trading using opposite Capri Holdings and Enjoy SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Enjoy SA 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 Enjoy SA will offset losses from the drop in Enjoy SA's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Enjoy SA vs. Energia Latina SA | Enjoy SA vs. Administradora Americana de | Enjoy SA vs. Embotelladora Andina SA | Enjoy SA vs. Salfacorp |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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