Correlation Between Capri Holdings and Plaza Centers
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Plaza Centers 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 Plaza Centers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Plaza Centers NV, you can compare the effects of market volatilities on Capri Holdings and Plaza Centers 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 Plaza Centers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Plaza Centers.
Diversification Opportunities for Capri Holdings and Plaza Centers
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capri and Plaza is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Plaza Centers NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Centers NV 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 Plaza Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Centers NV has no effect on the direction of Capri Holdings i.e., Capri Holdings and Plaza Centers go up and down completely randomly.
Pair Corralation between Capri Holdings and Plaza Centers
Given the investment horizon of 90 days Capri Holdings is expected to generate 1.57 times more return on investment than Plaza Centers. However, Capri Holdings is 1.57 times more volatile than Plaza Centers NV. It trades about -0.03 of its potential returns per unit of risk. Plaza Centers NV is currently generating about -0.15 per unit of risk. If you would invest 3,455 in Capri Holdings on August 29, 2024 and sell it today you would lose (1,103) from holding Capri Holdings or give up 31.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Capri Holdings vs. Plaza Centers NV
Performance |
| Timeline |
| Capri Holdings |
| Plaza Centers NV |
Capri Holdings and Plaza Centers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Plaza Centers
The main advantage of trading using opposite Capri Holdings and Plaza Centers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Plaza Centers 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 Plaza Centers will offset losses from the drop in Plaza Centers' long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Plaza Centers vs. JB Hunt Transport | Plaza Centers vs. Park Hotels Resorts | Plaza Centers vs. Dalata Hotel Group | Plaza Centers vs. PPHE Hotel Group |
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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