Correlation Between Capri Holdings and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Harding Loevner 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 Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Harding Loevner Funds, you can compare the effects of market volatilities on Capri Holdings and Harding Loevner 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 Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Harding Loevner.
Diversification Opportunities for Capri Holdings and Harding Loevner
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and Harding is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Harding Loevner Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Funds 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 Harding Loevner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harding Loevner Funds has no effect on the direction of Capri Holdings i.e., Capri Holdings and Harding Loevner go up and down completely randomly.
Pair Corralation between Capri Holdings and Harding Loevner
Given the investment horizon of 90 days Capri Holdings is expected to generate 3.93 times more return on investment than Harding Loevner. However, Capri Holdings is 3.93 times more volatile than Harding Loevner Funds. It trades about 0.19 of its potential returns per unit of risk. Harding Loevner Funds is currently generating about -0.22 per unit of risk. If you would invest 2,048 in Capri Holdings on August 30, 2024 and sell it today you would earn a total of 304.00 from holding Capri Holdings or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Capri Holdings vs. Harding Loevner Funds
Performance |
| Timeline |
| Capri Holdings |
| Harding Loevner Funds |
Capri Holdings and Harding Loevner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Harding Loevner
The main advantage of trading using opposite Capri Holdings and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Harding Loevner 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 Harding Loevner will offset losses from the drop in Harding Loevner'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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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