Correlation Between Capri Holdings and New Alternatives
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and New Alternatives 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 New Alternatives into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and New Alternatives Fund, you can compare the effects of market volatilities on Capri Holdings and New Alternatives 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 New Alternatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and New Alternatives.
Diversification Opportunities for Capri Holdings and New Alternatives
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and New is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and New Alternatives Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Alternatives 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 New Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Alternatives has no effect on the direction of Capri Holdings i.e., Capri Holdings and New Alternatives go up and down completely randomly.
Pair Corralation between Capri Holdings and New Alternatives
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the New Alternatives. In addition to that, Capri Holdings is 4.02 times more volatile than New Alternatives Fund. It trades about -0.06 of its total potential returns per unit of risk. New Alternatives Fund is currently generating about 0.06 per unit of volatility. If you would invest 5,969 in New Alternatives Fund on September 1, 2024 and sell it today you would earn a total of 667.00 from holding New Alternatives Fund or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. New Alternatives Fund
Performance |
| Timeline |
| Capri Holdings |
| New Alternatives |
Capri Holdings and New Alternatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and New Alternatives
The main advantage of trading using opposite Capri Holdings and New Alternatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, New Alternatives 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 New Alternatives will offset losses from the drop in New Alternatives' long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| New Alternatives vs. Guinness Atkinson Alternative | New Alternatives vs. Calvert Global Energy | New Alternatives vs. Portfolio 21 Global | New Alternatives vs. Green Century Balanced |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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