Correlation Between Capri Holdings and K2A Knaust
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and K2A Knaust 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 K2A Knaust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and K2A Knaust Andersson, you can compare the effects of market volatilities on Capri Holdings and K2A Knaust 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 K2A Knaust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and K2A Knaust.
Diversification Opportunities for Capri Holdings and K2A Knaust
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and K2A is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and K2A Knaust Andersson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2A Knaust Andersson 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 K2A Knaust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2A Knaust Andersson has no effect on the direction of Capri Holdings i.e., Capri Holdings and K2A Knaust go up and down completely randomly.
Pair Corralation between Capri Holdings and K2A Knaust
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the K2A Knaust. But the stock apears to be less risky and, when comparing its historical volatility, Capri Holdings is 1.23 times less risky than K2A Knaust. The stock trades about -0.31 of its potential returns per unit of risk. The K2A Knaust Andersson is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 858.00 in K2A Knaust Andersson on November 28, 2024 and sell it today you would lose (178.00) from holding K2A Knaust Andersson or give up 20.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Capri Holdings vs. K2A Knaust Andersson
Performance |
| Timeline |
| Capri Holdings |
| K2A Knaust Andersson |
Capri Holdings and K2A Knaust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and K2A Knaust
The main advantage of trading using opposite Capri Holdings and K2A Knaust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, K2A Knaust 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 K2A Knaust will offset losses from the drop in K2A Knaust's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| K2A Knaust vs. K Fast Holding AB | K2A Knaust vs. Nyfosa AB | K2A Knaust vs. Fastighets AB Balder | K2A Knaust vs. Catena AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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