Correlation Between Capri Holdings and MBT Bancshares
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and MBT Bancshares 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 MBT Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and MBT Bancshares, you can compare the effects of market volatilities on Capri Holdings and MBT Bancshares 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 MBT Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and MBT Bancshares.
Diversification Opportunities for Capri Holdings and MBT Bancshares
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capri and MBT is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and MBT Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBT Bancshares 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 MBT Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBT Bancshares has no effect on the direction of Capri Holdings i.e., Capri Holdings and MBT Bancshares go up and down completely randomly.
Pair Corralation between Capri Holdings and MBT Bancshares
Given the investment horizon of 90 days Capri Holdings is expected to generate 5.35 times more return on investment than MBT Bancshares. However, Capri Holdings is 5.35 times more volatile than MBT Bancshares. It trades about 0.26 of its potential returns per unit of risk. MBT Bancshares is currently generating about 0.22 per unit of risk. If you would invest 1,974 in Capri Holdings on September 1, 2024 and sell it today you would earn a total of 367.00 from holding Capri Holdings or generate 18.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. MBT Bancshares
Performance |
| Timeline |
| Capri Holdings |
| MBT Bancshares |
Capri Holdings and MBT Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and MBT Bancshares
The main advantage of trading using opposite Capri Holdings and MBT Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, MBT Bancshares 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 MBT Bancshares will offset losses from the drop in MBT Bancshares' long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| MBT Bancshares vs. Huntington Bancshares Incorporated | MBT Bancshares vs. KeyCorp | MBT Bancshares vs. Bank of Idaho | MBT Bancshares vs. Citizens Financial Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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