Correlation Between Capri Holdings and Fidelity Covington
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Fidelity Covington 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 Fidelity Covington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Fidelity Covington Trust, you can compare the effects of market volatilities on Capri Holdings and Fidelity Covington 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 Fidelity Covington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Fidelity Covington.
Diversification Opportunities for Capri Holdings and Fidelity Covington
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and Fidelity is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Fidelity Covington Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Covington Trust 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 Fidelity Covington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Covington Trust has no effect on the direction of Capri Holdings i.e., Capri Holdings and Fidelity Covington go up and down completely randomly.
Pair Corralation between Capri Holdings and Fidelity Covington
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Fidelity Covington. In addition to that, Capri Holdings is 4.95 times more volatile than Fidelity Covington Trust. It trades about -0.03 of its total potential returns per unit of risk. Fidelity Covington Trust is currently generating about 0.11 per unit of volatility. If you would invest 1,867 in Fidelity Covington Trust on September 1, 2024 and sell it today you would earn a total of 253.00 from holding Fidelity Covington Trust or generate 13.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Fidelity Covington Trust
Performance |
| Timeline |
| Capri Holdings |
| Fidelity Covington Trust |
Capri Holdings and Fidelity Covington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Fidelity Covington
The main advantage of trading using opposite Capri Holdings and Fidelity Covington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Fidelity Covington 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 Fidelity Covington will offset losses from the drop in Fidelity Covington's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Fidelity Covington vs. Fidelity MSCI Financials | Fidelity Covington vs. Fidelity MSCI Consumer | Fidelity Covington vs. Fidelity MSCI Consumer | Fidelity Covington vs. Fidelity MSCI Industrials |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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