Correlation Between Capri Holdings and First Trust
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and First Trust Nasdaq, you can compare the effects of market volatilities on Capri Holdings and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and First Trust.
Diversification Opportunities for Capri Holdings and First Trust
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and First is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and First Trust Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Nasdaq 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Nasdaq has no effect on the direction of Capri Holdings i.e., Capri Holdings and First Trust go up and down completely randomly.
Pair Corralation between Capri Holdings and First Trust
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the First Trust. In addition to that, Capri Holdings is 2.52 times more volatile than First Trust Nasdaq. It trades about -0.03 of its total potential returns per unit of risk. First Trust Nasdaq is currently generating about -0.01 per unit of volatility. If you would invest 1,670 in First Trust Nasdaq on September 1, 2024 and sell it today you would lose (65.00) from holding First Trust Nasdaq or give up 3.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. First Trust Nasdaq
Performance |
| Timeline |
| Capri Holdings |
| First Trust Nasdaq |
Capri Holdings and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and First Trust
The main advantage of trading using opposite Capri Holdings and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| First Trust vs. First Trust Indxx | First Trust vs. First Trust Senior | First Trust vs. First Trust AlphaDEX | First Trust vs. First Trust Indxx |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |