Correlation Between Capri Holdings and The Gabelli
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and The Gabelli 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 The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and The Gabelli Focus, you can compare the effects of market volatilities on Capri Holdings and The Gabelli 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 The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and The Gabelli.
Diversification Opportunities for Capri Holdings and The Gabelli
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and The is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and The Gabelli Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Focus 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 The Gabelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Focus has no effect on the direction of Capri Holdings i.e., Capri Holdings and The Gabelli go up and down completely randomly.
Pair Corralation between Capri Holdings and The Gabelli
Given the investment horizon of 90 days Capri Holdings is expected to generate 4.7 times more return on investment than The Gabelli. However, Capri Holdings is 4.7 times more volatile than The Gabelli Focus. It trades about 0.1 of its potential returns per unit of risk. The Gabelli Focus is currently generating about 0.23 per unit of risk. If you would invest 2,139 in Capri Holdings on August 29, 2024 and sell it today you would earn a total of 145.00 from holding Capri Holdings or generate 6.78% 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. The Gabelli Focus
Performance |
| Timeline |
| Capri Holdings |
| Gabelli Focus |
Capri Holdings and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and The Gabelli
The main advantage of trading using opposite Capri Holdings and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, The Gabelli 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 The Gabelli will offset losses from the drop in The Gabelli's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| The Gabelli vs. Gold And Precious | The Gabelli vs. Precious Metals And | The Gabelli vs. The Gold Bullion | The Gabelli vs. Gabelli Gold Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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