Correlation Between Capri Holdings and Roku
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Roku 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 Roku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Roku Inc, you can compare the effects of market volatilities on Capri Holdings and Roku 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 Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Roku.
Diversification Opportunities for Capri Holdings and Roku
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Capri and Roku is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc 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 Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of Capri Holdings i.e., Capri Holdings and Roku go up and down completely randomly.
Pair Corralation between Capri Holdings and Roku
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Roku. In addition to that, Capri Holdings is 1.01 times more volatile than Roku Inc. It trades about -0.06 of its total potential returns per unit of risk. Roku Inc is currently generating about 0.0 per unit of volatility. If you would invest 7,654 in Roku Inc on September 1, 2024 and sell it today you would lose (1,222) from holding Roku Inc or give up 15.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.82% |
| Values | Daily Returns |
Capri Holdings vs. Roku Inc
Performance |
| Timeline |
| Capri Holdings |
| Roku Inc |
Capri Holdings and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Roku
The main advantage of trading using opposite Capri Holdings and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku'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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |