Correlation Between Capri Holdings and Nissan
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Nissan 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 Nissan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Nissan, you can compare the effects of market volatilities on Capri Holdings and Nissan 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 Nissan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Nissan.
Diversification Opportunities for Capri Holdings and Nissan
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and Nissan is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Nissan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissan 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 Nissan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nissan has no effect on the direction of Capri Holdings i.e., Capri Holdings and Nissan go up and down completely randomly.
Pair Corralation between Capri Holdings and Nissan
Given the investment horizon of 90 days Capri Holdings is expected to generate 2.18 times less return on investment than Nissan. In addition to that, Capri Holdings is 1.97 times more volatile than Nissan. It trades about 0.1 of its total potential returns per unit of risk. Nissan is currently generating about 0.42 per unit of volatility. If you would invest 143,900 in Nissan on August 29, 2024 and sell it today you would earn a total of 21,600 from holding Nissan or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.61% |
| Values | Daily Returns |
Capri Holdings vs. Nissan
Performance |
| Timeline |
| Capri Holdings |
| Nissan |
Capri Holdings and Nissan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Nissan
The main advantage of trading using opposite Capri Holdings and Nissan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Nissan 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 Nissan will offset losses from the drop in Nissan's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Nissan vs. Adgar Investments and | Nissan vs. Millennium Food Tech LP | Nissan vs. Willy Food | Nissan vs. Harel Insurance Investments |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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