Correlation Between Capri Holdings and Farmers Bancorp
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Farmers Bancorp 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 Farmers Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Farmers Bancorp, you can compare the effects of market volatilities on Capri Holdings and Farmers Bancorp 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 Farmers Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Farmers Bancorp.
Diversification Opportunities for Capri Holdings and Farmers Bancorp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and Farmers is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Farmers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bancorp 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 Farmers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bancorp has no effect on the direction of Capri Holdings i.e., Capri Holdings and Farmers Bancorp go up and down completely randomly.
Pair Corralation between Capri Holdings and Farmers Bancorp
Given the investment horizon of 90 days Capri Holdings is expected to generate 3.39 times more return on investment than Farmers Bancorp. However, Capri Holdings is 3.39 times more volatile than Farmers Bancorp. It trades about 0.23 of its potential returns per unit of risk. Farmers Bancorp is currently generating about 0.35 per unit of risk. If you would invest 2,010 in Capri Holdings on September 2, 2024 and sell it today you would earn a total of 331.00 from holding Capri Holdings or generate 16.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Farmers Bancorp
Performance |
| Timeline |
| Capri Holdings |
| Farmers Bancorp |
Capri Holdings and Farmers Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Farmers Bancorp
The main advantage of trading using opposite Capri Holdings and Farmers Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Farmers Bancorp 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 Farmers Bancorp will offset losses from the drop in Farmers Bancorp's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Farmers Bancorp vs. First Farmers Financial | Farmers Bancorp vs. Farmers Merchants Bancorp | Farmers Bancorp vs. Lakeland Financial | Farmers Bancorp vs. Eagle Financial Services |
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.
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