Correlation Between Capri Holdings and Perception Capital
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Perception Capital 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 Perception Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Perception Capital Corp, you can compare the effects of market volatilities on Capri Holdings and Perception Capital 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 Perception Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Perception Capital.
Diversification Opportunities for Capri Holdings and Perception Capital
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capri and Perception is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Perception Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perception Capital Corp 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 Perception Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perception Capital Corp has no effect on the direction of Capri Holdings i.e., Capri Holdings and Perception Capital go up and down completely randomly.
Pair Corralation between Capri Holdings and Perception Capital
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Perception Capital. In addition to that, Capri Holdings is 2.76 times more volatile than Perception Capital Corp. It trades about -0.02 of its total potential returns per unit of risk. Perception Capital Corp is currently generating about 0.05 per unit of volatility. If you would invest 1,023 in Perception Capital Corp on August 30, 2024 and sell it today you would earn a total of 98.00 from holding Perception Capital Corp or generate 9.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.11% |
| Values | Daily Returns |
Capri Holdings vs. Perception Capital Corp
Performance |
| Timeline |
| Capri Holdings |
| Perception Capital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Capri Holdings and Perception Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Perception Capital
The main advantage of trading using opposite Capri Holdings and Perception Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Perception Capital 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 Perception Capital will offset losses from the drop in Perception Capital's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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