Correlation Between Capri Holdings and Mfs International
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Mfs International 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 Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Mfs International Value, you can compare the effects of market volatilities on Capri Holdings and Mfs International 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Mfs International.
Diversification Opportunities for Capri Holdings and Mfs International
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and MFS is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Mfs International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Capri Holdings i.e., Capri Holdings and Mfs International go up and down completely randomly.
Pair Corralation between Capri Holdings and Mfs International
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Mfs International. In addition to that, Capri Holdings is 11.17 times more volatile than Mfs International Value. It trades about -0.12 of its total potential returns per unit of risk. Mfs International Value is currently generating about -0.2 per unit of volatility. If you would invest 3,866 in Mfs International Value on August 29, 2024 and sell it today you would lose (234.00) from holding Mfs International Value or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Mfs International Value
Performance |
| Timeline |
| Capri Holdings |
| Mfs International Value |
Capri Holdings and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Mfs International
The main advantage of trading using opposite Capri Holdings and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Mfs International 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 Mfs International will offset losses from the drop in Mfs International's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Mfs International vs. Fidelity Sai Convertible | Mfs International vs. Gabelli Convertible And | Mfs International vs. Absolute Convertible Arbitrage | Mfs International vs. Calamos Dynamic Convertible |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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