Correlation Between Capri Holdings and Nafoods Group
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Nafoods Group 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 Nafoods Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Nafoods Group JSC, you can compare the effects of market volatilities on Capri Holdings and Nafoods Group 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 Nafoods Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Nafoods Group.
Diversification Opportunities for Capri Holdings and Nafoods Group
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capri and Nafoods is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Nafoods Group JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nafoods Group JSC 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 Nafoods Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nafoods Group JSC has no effect on the direction of Capri Holdings i.e., Capri Holdings and Nafoods Group go up and down completely randomly.
Pair Corralation between Capri Holdings and Nafoods Group
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Nafoods Group. In addition to that, Capri Holdings is 1.68 times more volatile than Nafoods Group JSC. It trades about -0.06 of its total potential returns per unit of risk. Nafoods Group JSC is currently generating about 0.09 per unit of volatility. If you would invest 1,400,000 in Nafoods Group JSC on September 1, 2024 and sell it today you would earn a total of 615,000 from holding Nafoods Group JSC or generate 43.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Nafoods Group JSC
Performance |
| Timeline |
| Capri Holdings |
| Nafoods Group JSC |
Capri Holdings and Nafoods Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Nafoods Group
The main advantage of trading using opposite Capri Holdings and Nafoods Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Nafoods Group 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 Nafoods Group will offset losses from the drop in Nafoods Group's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Nafoods Group vs. FIT INVEST JSC | Nafoods Group vs. Damsan JSC | Nafoods Group vs. An Phat Plastic | Nafoods Group vs. Alphanam ME |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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