Correlation Between Capri Holdings and Getty Copper
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Getty Copper 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 Getty Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Getty Copper, you can compare the effects of market volatilities on Capri Holdings and Getty Copper 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 Getty Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Getty Copper.
Diversification Opportunities for Capri Holdings and Getty Copper
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capri and Getty is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Getty Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Copper 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 Getty Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Copper has no effect on the direction of Capri Holdings i.e., Capri Holdings and Getty Copper go up and down completely randomly.
Pair Corralation between Capri Holdings and Getty Copper
Given the investment horizon of 90 days Capri Holdings is expected to generate 0.26 times more return on investment than Getty Copper. However, Capri Holdings is 3.81 times less risky than Getty Copper. It trades about -0.23 of its potential returns per unit of risk. Getty Copper is currently generating about -0.21 per unit of risk. If you would invest 2,534 in Capri Holdings on November 28, 2024 and sell it today you would lose (422.00) from holding Capri Holdings or give up 16.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Getty Copper
Performance |
| Timeline |
| Capri Holdings |
| Getty Copper |
Capri Holdings and Getty Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Getty Copper
The main advantage of trading using opposite Capri Holdings and Getty Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Getty Copper 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 Getty Copper will offset losses from the drop in Getty Copper's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Getty Copper vs. OM Holdings Limited | Getty Copper vs. Cobalt Blue Holdings | Getty Copper vs. Metals X Limited |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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