Correlation Between Capri Holdings and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Goldman Sachs 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 Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Goldman Sachs E, you can compare the effects of market volatilities on Capri Holdings and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Goldman Sachs.
Diversification Opportunities for Capri Holdings and Goldman Sachs
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and Goldman is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Goldman Sachs E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs E 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs E has no effect on the direction of Capri Holdings i.e., Capri Holdings and Goldman Sachs go up and down completely randomly.
Pair Corralation between Capri Holdings and Goldman Sachs
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Goldman Sachs. In addition to that, Capri Holdings is 10.28 times more volatile than Goldman Sachs E. It trades about -0.01 of its total potential returns per unit of risk. Goldman Sachs E is currently generating about 0.04 per unit of volatility. If you would invest 868.00 in Goldman Sachs E on September 2, 2024 and sell it today you would earn a total of 52.00 from holding Goldman Sachs E or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Goldman Sachs E
Performance |
| Timeline |
| Capri Holdings |
| Goldman Sachs E |
Capri Holdings and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Goldman Sachs
The main advantage of trading using opposite Capri Holdings and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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