Correlation Between Capri Holdings and IShares China
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and IShares China 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 IShares China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and iShares China LargeCap, you can compare the effects of market volatilities on Capri Holdings and IShares China 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 IShares China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and IShares China.
Diversification Opportunities for Capri Holdings and IShares China
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and IShares is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and iShares China LargeCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares China LargeCap 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 IShares China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares China LargeCap has no effect on the direction of Capri Holdings i.e., Capri Holdings and IShares China go up and down completely randomly.
Pair Corralation between Capri Holdings and IShares China
Given the investment horizon of 90 days Capri Holdings is expected to generate 3.3 times more return on investment than IShares China. However, Capri Holdings is 3.3 times more volatile than iShares China LargeCap. It trades about 0.1 of its potential returns per unit of risk. iShares China LargeCap is currently generating about -0.22 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. iShares China LargeCap
Performance |
| Timeline |
| Capri Holdings |
| iShares China LargeCap |
Capri Holdings and IShares China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and IShares China
The main advantage of trading using opposite Capri Holdings and IShares China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, IShares China 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 IShares China will offset losses from the drop in IShares China's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| IShares China vs. iShares MSCI Emerging | IShares China vs. iShares Global Aggregate | IShares China vs. iShares CoreSP MidCap | IShares China vs. iShares SP 500 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Transaction History View history of all your transactions and understand their impact on performance |