Correlation Between Capri Holdings and John Hancock
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and John Hancock 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 John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and John Hancock Disciplined, you can compare the effects of market volatilities on Capri Holdings and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and John Hancock.
Diversification Opportunities for Capri Holdings and John Hancock
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and John is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and John Hancock Disciplined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Disciplined 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Disciplined has no effect on the direction of Capri Holdings i.e., Capri Holdings and John Hancock go up and down completely randomly.
Pair Corralation between Capri Holdings and John Hancock
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the John Hancock. In addition to that, Capri Holdings is 5.05 times more volatile than John Hancock Disciplined. It trades about -0.26 of its total potential returns per unit of risk. John Hancock Disciplined is currently generating about -0.11 per unit of volatility. If you would invest 2,374 in John Hancock Disciplined on November 27, 2024 and sell it today you would lose (33.00) from holding John Hancock Disciplined or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. John Hancock Disciplined
Performance |
| Timeline |
| Capri Holdings |
| John Hancock Disciplined |
Capri Holdings and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and John Hancock
The main advantage of trading using opposite Capri Holdings and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| John Hancock vs. Transamerica Emerging Markets | John Hancock vs. Rbc Emerging Markets | John Hancock vs. Doubleline Emerging Markets | John Hancock vs. Mondrian Emerging Markets |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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