Correlation Between Capri Holdings and Kering SA
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Kering SA 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 Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Kering SA, you can compare the effects of market volatilities on Capri Holdings and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Kering SA.
Diversification Opportunities for Capri Holdings and Kering SA
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capri and Kering is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Capri Holdings i.e., Capri Holdings and Kering SA go up and down completely randomly.
Pair Corralation between Capri Holdings and Kering SA
Given the investment horizon of 90 days Capri Holdings is expected to generate 1.51 times more return on investment than Kering SA. However, Capri Holdings is 1.51 times more volatile than Kering SA. It trades about 0.19 of its potential returns per unit of risk. Kering SA is currently generating about 0.05 per unit of risk. If you would invest 2,135 in Capri Holdings on October 22, 2024 and sell it today you would earn a total of 247.00 from holding Capri Holdings or generate 11.57% 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. Kering SA
Performance |
| Timeline |
| Capri Holdings |
| Kering SA |
Capri Holdings and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Kering SA
The main advantage of trading using opposite Capri Holdings and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Kering SA vs. Chow Tai Fook | Kering SA vs. Christian Dior SE | Kering SA vs. Kering SA | Kering SA vs. Christian Dior SE |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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