Correlation Between Capri Holdings and Gyldendal ASA
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Gyldendal ASA 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 Gyldendal ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Gyldendal ASA, you can compare the effects of market volatilities on Capri Holdings and Gyldendal ASA 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 Gyldendal ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Gyldendal ASA.
Diversification Opportunities for Capri Holdings and Gyldendal ASA
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capri and Gyldendal is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Gyldendal ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gyldendal ASA 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 Gyldendal ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gyldendal ASA has no effect on the direction of Capri Holdings i.e., Capri Holdings and Gyldendal ASA go up and down completely randomly.
Pair Corralation between Capri Holdings and Gyldendal ASA
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Gyldendal ASA. In addition to that, Capri Holdings is 1.47 times more volatile than Gyldendal ASA. It trades about -0.06 of its total potential returns per unit of risk. Gyldendal ASA is currently generating about -0.04 per unit of volatility. If you would invest 55,000 in Gyldendal ASA on September 1, 2024 and sell it today you would lose (15,000) from holding Gyldendal ASA or give up 27.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.26% |
Values | Daily Returns |
Capri Holdings vs. Gyldendal ASA
Performance |
Timeline |
Capri Holdings |
Gyldendal ASA |
Capri Holdings and Gyldendal ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Capri Holdings and Gyldendal ASA
The main advantage of trading using opposite Capri Holdings and Gyldendal ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Gyldendal ASA 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 Gyldendal ASA will offset losses from the drop in Gyldendal ASA's 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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