Correlation Between Capri Holdings and Lees Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Lees Pharmaceutical 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 Lees Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Lees Pharmaceutical Holdings, you can compare the effects of market volatilities on Capri Holdings and Lees Pharmaceutical 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 Lees Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Lees Pharmaceutical.
Diversification Opportunities for Capri Holdings and Lees Pharmaceutical
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and Lees is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Lees Pharmaceutical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lees Pharmaceutical 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 Lees Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lees Pharmaceutical has no effect on the direction of Capri Holdings i.e., Capri Holdings and Lees Pharmaceutical go up and down completely randomly.
Pair Corralation between Capri Holdings and Lees Pharmaceutical
Given the investment horizon of 90 days Capri Holdings is expected to generate 0.05 times more return on investment than Lees Pharmaceutical. However, Capri Holdings is 20.98 times less risky than Lees Pharmaceutical. It trades about -0.02 of its potential returns per unit of risk. Lees Pharmaceutical Holdings is currently generating about -0.09 per unit of risk. If you would invest 5,701 in Capri Holdings on August 30, 2024 and sell it today you would lose (3,349) from holding Capri Holdings or give up 58.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 29.29% |
| Values | Daily Returns |
Capri Holdings vs. Lees Pharmaceutical Holdings
Performance |
| Timeline |
| Capri Holdings |
| Lees Pharmaceutical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Capri Holdings and Lees Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Lees Pharmaceutical
The main advantage of trading using opposite Capri Holdings and Lees Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Lees Pharmaceutical 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 Lees Pharmaceutical will offset losses from the drop in Lees Pharmaceutical's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Lees Pharmaceutical vs. AerSale Corp | Lees Pharmaceutical vs. EvoAir Holdings | Lees Pharmaceutical vs. Finnair Oyj | Lees Pharmaceutical vs. Allient |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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