Correlation Between Capri Holdings and Ganfeng Lithium
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Ganfeng Lithium 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 Ganfeng Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Ganfeng Lithium Co, you can compare the effects of market volatilities on Capri Holdings and Ganfeng Lithium 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 Ganfeng Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Ganfeng Lithium.
Diversification Opportunities for Capri Holdings and Ganfeng Lithium
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and Ganfeng is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Ganfeng Lithium Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganfeng Lithium 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 Ganfeng Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ganfeng Lithium has no effect on the direction of Capri Holdings i.e., Capri Holdings and Ganfeng Lithium go up and down completely randomly.
Pair Corralation between Capri Holdings and Ganfeng Lithium
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Ganfeng Lithium. But the stock apears to be less risky and, when comparing its historical volatility, Capri Holdings is 1.66 times less risky than Ganfeng Lithium. The stock trades about -0.03 of its potential returns per unit of risk. The Ganfeng Lithium Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 147.00 in Ganfeng Lithium Co on September 1, 2024 and sell it today you would earn a total of 168.00 from holding Ganfeng Lithium Co or generate 114.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Capri Holdings vs. Ganfeng Lithium Co
Performance |
| Timeline |
| Capri Holdings |
| Ganfeng Lithium |
Capri Holdings and Ganfeng Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Ganfeng Lithium
The main advantage of trading using opposite Capri Holdings and Ganfeng Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Ganfeng Lithium 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 Ganfeng Lithium will offset losses from the drop in Ganfeng Lithium's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Ganfeng Lithium vs. BASF SE NA | Ganfeng Lithium vs. Braskem SA Class | Ganfeng Lithium vs. Lsb Industries | Ganfeng Lithium vs. Dow Inc |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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