Correlation Between Capri Holdings and Mainstay
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Mainstay 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 Mainstay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Mainstay Sp 500, you can compare the effects of market volatilities on Capri Holdings and Mainstay 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 Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Mainstay.
Diversification Opportunities for Capri Holdings and Mainstay
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capri and Mainstay is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 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 Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of Capri Holdings i.e., Capri Holdings and Mainstay go up and down completely randomly.
Pair Corralation between Capri Holdings and Mainstay
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Mainstay. In addition to that, Capri Holdings is 4.65 times more volatile than Mainstay Sp 500. It trades about -0.26 of its total potential returns per unit of risk. Mainstay Sp 500 is currently generating about -0.03 per unit of volatility. If you would invest 6,376 in Mainstay Sp 500 on November 27, 2024 and sell it today you would lose (27.00) from holding Mainstay Sp 500 or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Mainstay Sp 500
Performance |
| Timeline |
| Capri Holdings |
| Mainstay Sp 500 |
Capri Holdings and Mainstay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Mainstay
The main advantage of trading using opposite Capri Holdings and Mainstay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Mainstay 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 Mainstay will offset losses from the drop in Mainstay's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Mainstay vs. Franklin Adjustable Government | Mainstay vs. Us Government Securities | Mainstay vs. Old Westbury Municipal | Mainstay vs. Vanguard Intermediate Term Government |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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