Correlation Between Capri Holdings and Global X
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Global X Europe, you can compare the effects of market volatilities on Capri Holdings and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Global X.
Diversification Opportunities for Capri Holdings and Global X
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and Global is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Global X Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Europe 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Europe has no effect on the direction of Capri Holdings i.e., Capri Holdings and Global X go up and down completely randomly.
Pair Corralation between Capri Holdings and Global X
Given the investment horizon of 90 days Capri Holdings is expected to generate 3.69 times more return on investment than Global X. However, Capri Holdings is 3.69 times more volatile than Global X Europe. It trades about 0.1 of its potential returns per unit of risk. Global X Europe is currently generating about -0.27 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Global X Europe
Performance |
| Timeline |
| Capri Holdings |
| Global X Europe |
Capri Holdings and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Global X
The main advantage of trading using opposite Capri Holdings and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Global X vs. Vanguard FTSE Developed | Global X vs. Vanguard FTSE Emerging | Global X vs. Vanguard FTSE Developed | Global X vs. Vanguard Dividend Appreciation |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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