Correlation Between Capri Holdings and Gamatronic Electronic
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Gamatronic Electronic 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 Gamatronic Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Gamatronic Electronic Industries, you can compare the effects of market volatilities on Capri Holdings and Gamatronic Electronic 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 Gamatronic Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Gamatronic Electronic.
Diversification Opportunities for Capri Holdings and Gamatronic Electronic
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and Gamatronic is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Gamatronic Electronic Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamatronic Electronic 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 Gamatronic Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamatronic Electronic has no effect on the direction of Capri Holdings i.e., Capri Holdings and Gamatronic Electronic go up and down completely randomly.
Pair Corralation between Capri Holdings and Gamatronic Electronic
Given the investment horizon of 90 days Capri Holdings is expected to generate 1.63 times more return on investment than Gamatronic Electronic. However, Capri Holdings is 1.63 times more volatile than Gamatronic Electronic Industries. It trades about -0.03 of its potential returns per unit of risk. Gamatronic Electronic Industries is currently generating about -0.05 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 | 76.19% |
| Values | Daily Returns |
Capri Holdings vs. Gamatronic Electronic Industri
Performance |
| Timeline |
| Capri Holdings |
| Gamatronic Electronic |
Capri Holdings and Gamatronic Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Gamatronic Electronic
The main advantage of trading using opposite Capri Holdings and Gamatronic Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Gamatronic Electronic 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 Gamatronic Electronic will offset losses from the drop in Gamatronic Electronic's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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