Correlation Between Capri Holdings and Innovator Small
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Innovator Small 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 Innovator Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Innovator Small Cap, you can compare the effects of market volatilities on Capri Holdings and Innovator Small 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 Innovator Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Innovator Small.
Diversification Opportunities for Capri Holdings and Innovator Small
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capri and Innovator is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Innovator Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Small Cap 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 Innovator Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Small Cap has no effect on the direction of Capri Holdings i.e., Capri Holdings and Innovator Small go up and down completely randomly.
Pair Corralation between Capri Holdings and Innovator Small
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Innovator Small. In addition to that, Capri Holdings is 8.55 times more volatile than Innovator Small Cap. It trades about -0.03 of its total potential returns per unit of risk. Innovator Small Cap is currently generating about 0.18 per unit of volatility. If you would invest 2,493 in Innovator Small Cap on September 1, 2024 and sell it today you would earn a total of 172.00 from holding Innovator Small Cap or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.79% |
| Values | Daily Returns |
Capri Holdings vs. Innovator Small Cap
Performance |
| Timeline |
| Capri Holdings |
| Innovator Small Cap |
Capri Holdings and Innovator Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Innovator Small
The main advantage of trading using opposite Capri Holdings and Innovator Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Innovator Small 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 Innovator Small will offset losses from the drop in Innovator Small's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Innovator Small vs. Innovator ETFs Trust | Innovator Small vs. First Trust Cboe | Innovator Small vs. Innovator SP 500 | Innovator Small vs. Innovator Equity Power |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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