Correlation Between Capri Holdings and Gran Tierra
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Gran Tierra 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 Gran Tierra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Gran Tierra Energy, you can compare the effects of market volatilities on Capri Holdings and Gran Tierra 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 Gran Tierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Gran Tierra.
Diversification Opportunities for Capri Holdings and Gran Tierra
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and Gran is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Gran Tierra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gran Tierra Energy 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 Gran Tierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gran Tierra Energy has no effect on the direction of Capri Holdings i.e., Capri Holdings and Gran Tierra go up and down completely randomly.
Pair Corralation between Capri Holdings and Gran Tierra
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Gran Tierra. In addition to that, Capri Holdings is 1.37 times more volatile than Gran Tierra Energy. It trades about -0.01 of its total potential returns per unit of risk. Gran Tierra Energy is currently generating about 0.04 per unit of volatility. If you would invest 725.00 in Gran Tierra Energy on September 2, 2024 and sell it today you would earn a total of 237.00 from holding Gran Tierra Energy or generate 32.69% 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. Gran Tierra Energy
Performance |
| Timeline |
| Capri Holdings |
| Gran Tierra Energy |
Capri Holdings and Gran Tierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Gran Tierra
The main advantage of trading using opposite Capri Holdings and Gran Tierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Gran Tierra 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 Gran Tierra will offset losses from the drop in Gran Tierra'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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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