Correlation Between Capri Holdings and Medical Marijuana
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Medical Marijuana 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 Medical Marijuana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Medical Marijuana I, you can compare the effects of market volatilities on Capri Holdings and Medical Marijuana 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 Medical Marijuana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Medical Marijuana.
Diversification Opportunities for Capri Holdings and Medical Marijuana
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Capri and Medical is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Medical Marijuana I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Marijuana 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 Medical Marijuana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Marijuana has no effect on the direction of Capri Holdings i.e., Capri Holdings and Medical Marijuana go up and down completely randomly.
Pair Corralation between Capri Holdings and Medical Marijuana
Given the investment horizon of 90 days Capri Holdings is expected to generate 0.62 times more return on investment than Medical Marijuana. However, Capri Holdings is 1.62 times less risky than Medical Marijuana. It trades about -0.03 of its potential returns per unit of risk. Medical Marijuana I is currently generating about -0.08 per unit of risk. If you would invest 3,441 in Capri Holdings on September 1, 2024 and sell it today you would lose (1,100) from holding Capri Holdings or give up 31.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Capri Holdings vs. Medical Marijuana I
Performance |
| Timeline |
| Capri Holdings |
| Medical Marijuana |
Capri Holdings and Medical Marijuana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Medical Marijuana
The main advantage of trading using opposite Capri Holdings and Medical Marijuana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Medical Marijuana 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 Medical Marijuana will offset losses from the drop in Medical Marijuana's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Medical Marijuana vs. Brainsway | Medical Marijuana vs. Venus Concept | Medical Marijuana vs. Tactile Systems Technology | Medical Marijuana vs. Icecure Medical |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |