Correlation Between Capri Holdings and Lachish
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Lachish 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 Lachish into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Lachish, you can compare the effects of market volatilities on Capri Holdings and Lachish 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 Lachish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Lachish.
Diversification Opportunities for Capri Holdings and Lachish
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and Lachish is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Lachish in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lachish 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 Lachish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lachish has no effect on the direction of Capri Holdings i.e., Capri Holdings and Lachish go up and down completely randomly.
Pair Corralation between Capri Holdings and Lachish
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Lachish. In addition to that, Capri Holdings is 2.47 times more volatile than Lachish. It trades about -0.23 of its total potential returns per unit of risk. Lachish is currently generating about -0.37 per unit of volatility. If you would invest 205,900 in Lachish on November 28, 2024 and sell it today you would lose (17,800) from holding Lachish or give up 8.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Capri Holdings vs. Lachish
Performance |
| Timeline |
| Capri Holdings |
| Lachish |
Capri Holdings and Lachish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Lachish
The main advantage of trading using opposite Capri Holdings and Lachish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Lachish 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 Lachish will offset losses from the drop in Lachish's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Lachish vs. Sure Tech Investments LP | Lachish vs. Analyst IMS Investment | Lachish vs. Azorim Investment Development | Lachish vs. Harel Insurance Investments |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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