Correlation Between Capri Holdings and Matthews China
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Matthews China 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 Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Matthews China Fund, you can compare the effects of market volatilities on Capri Holdings and Matthews China 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 Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Matthews China.
Diversification Opportunities for Capri Holdings and Matthews China
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and Matthews is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Matthews China Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China 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 Matthews China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China has no effect on the direction of Capri Holdings i.e., Capri Holdings and Matthews China go up and down completely randomly.
Pair Corralation between Capri Holdings and Matthews China
Given the investment horizon of 90 days Capri Holdings is expected to generate 1.68 times more return on investment than Matthews China. However, Capri Holdings is 1.68 times more volatile than Matthews China Fund. It trades about 0.1 of its potential returns per unit of risk. Matthews China Fund is currently generating about -0.2 per unit of risk. If you would invest 2,139 in Capri Holdings on August 29, 2024 and sell it today you would earn a total of 145.00 from holding Capri Holdings or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Matthews China Fund
Performance |
| Timeline |
| Capri Holdings |
| Matthews China |
Capri Holdings and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Matthews China
The main advantage of trading using opposite Capri Holdings and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Matthews China 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 Matthews China will offset losses from the drop in Matthews China's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Matthews China vs. Matthews Pacific Tiger | Matthews China vs. Matthews India Fund | Matthews China vs. Matthews China Dividend | Matthews China vs. Matthews Asia Growth |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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