Correlation Between Capri Holdings and FNP Technologies
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and FNP Technologies 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 FNP Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and FNP Technologies SA, you can compare the effects of market volatilities on Capri Holdings and FNP Technologies 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 FNP Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and FNP Technologies.
Diversification Opportunities for Capri Holdings and FNP Technologies
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and FNP is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and FNP Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNP Technologies 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 FNP Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNP Technologies has no effect on the direction of Capri Holdings i.e., Capri Holdings and FNP Technologies go up and down completely randomly.
Pair Corralation between Capri Holdings and FNP Technologies
Given the investment horizon of 90 days Capri Holdings is expected to generate 0.76 times more return on investment than FNP Technologies. However, Capri Holdings is 1.31 times less risky than FNP Technologies. It trades about -0.03 of its potential returns per unit of risk. FNP Technologies SA is currently generating about -0.13 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 | Weak |
| Accuracy | 96.92% |
| Values | Daily Returns |
Capri Holdings vs. FNP Technologies SA
Performance |
| Timeline |
| Capri Holdings |
| FNP Technologies |
Capri Holdings and FNP Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and FNP Technologies
The main advantage of trading using opposite Capri Holdings and FNP Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, FNP Technologies 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 FNP Technologies will offset losses from the drop in FNP Technologies' long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| FNP Technologies vs. Novatech Industries SA | FNP Technologies vs. Metalliance SA | FNP Technologies vs. Bilendi | FNP Technologies vs. CMG Cleantech SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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