Correlation Between Capri Holdings and First Trust
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and First Trust NASDAQ, you can compare the effects of market volatilities on Capri Holdings and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and First Trust.
Diversification Opportunities for Capri Holdings and First Trust
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capri and First is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and First Trust NASDAQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust NASDAQ 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust NASDAQ has no effect on the direction of Capri Holdings i.e., Capri Holdings and First Trust go up and down completely randomly.
Pair Corralation between Capri Holdings and First Trust
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the First Trust. In addition to that, Capri Holdings is 4.23 times more volatile than First Trust NASDAQ. It trades about -0.03 of its total potential returns per unit of risk. First Trust NASDAQ is currently generating about 0.14 per unit of volatility. If you would invest 4,222 in First Trust NASDAQ on August 29, 2024 and sell it today you would earn a total of 926.00 from holding First Trust NASDAQ or generate 21.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Capri Holdings vs. First Trust NASDAQ
Performance |
| Timeline |
| Capri Holdings |
| First Trust NASDAQ |
Capri Holdings and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and First Trust
The main advantage of trading using opposite Capri Holdings and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| First Trust vs. BMO Covered Call | First Trust vs. BMO Canadian High | First Trust vs. BMO Europe High | First Trust vs. Harvest Healthcare Leaders |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |