Correlation Between Capri Holdings and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Franklin Lifesmart 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 Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Franklin Lifesmart 2060, you can compare the effects of market volatilities on Capri Holdings and Franklin Lifesmart 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 Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Franklin Lifesmart.
Diversification Opportunities for Capri Holdings and Franklin Lifesmart
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and Franklin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Franklin Lifesmart 2060 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart 2060 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 Franklin Lifesmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Lifesmart 2060 has no effect on the direction of Capri Holdings i.e., Capri Holdings and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Capri Holdings and Franklin Lifesmart
Given the investment horizon of 90 days Capri Holdings is expected to generate 6.19 times more return on investment than Franklin Lifesmart. However, Capri Holdings is 6.19 times more volatile than Franklin Lifesmart 2060. It trades about 0.26 of its potential returns per unit of risk. Franklin Lifesmart 2060 is currently generating about 0.25 per unit of risk. If you would invest 1,974 in Capri Holdings on September 1, 2024 and sell it today you would earn a total of 367.00 from holding Capri Holdings or generate 18.59% 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. Franklin Lifesmart 2060
Performance |
| Timeline |
| Capri Holdings |
| Franklin Lifesmart 2060 |
Capri Holdings and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Franklin Lifesmart
The main advantage of trading using opposite Capri Holdings and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Franklin Lifesmart 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 Franklin Lifesmart will offset losses from the drop in Franklin Lifesmart's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Franklin Lifesmart vs. Mirova Global Green | Franklin Lifesmart vs. Barings Global Floating | Franklin Lifesmart vs. Federated Global Allocation | Franklin Lifesmart vs. Wisdomtree Siegel Global |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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