Correlation Between Capri Holdings and TheRealReal
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and TheRealReal 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 TheRealReal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and TheRealReal, you can compare the effects of market volatilities on Capri Holdings and TheRealReal 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 TheRealReal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and TheRealReal.
Diversification Opportunities for Capri Holdings and TheRealReal
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capri and TheRealReal is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and TheRealReal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TheRealReal 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 TheRealReal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TheRealReal has no effect on the direction of Capri Holdings i.e., Capri Holdings and TheRealReal go up and down completely randomly.
Pair Corralation between Capri Holdings and TheRealReal
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the TheRealReal. But the stock apears to be less risky and, when comparing its historical volatility, Capri Holdings is 1.45 times less risky than TheRealReal. The stock trades about -0.04 of its potential returns per unit of risk. The TheRealReal is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 191.00 in TheRealReal on August 27, 2024 and sell it today you would earn a total of 283.00 from holding TheRealReal or generate 148.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. TheRealReal
Performance |
| Timeline |
| Capri Holdings |
| TheRealReal |
Capri Holdings and TheRealReal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and TheRealReal
The main advantage of trading using opposite Capri Holdings and TheRealReal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, TheRealReal 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 TheRealReal will offset losses from the drop in TheRealReal's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| TheRealReal vs. Capri Holdings | TheRealReal vs. Movado Group | TheRealReal vs. Tapestry | TheRealReal vs. Brilliant Earth 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 CEOs Directory module to screen CEOs from public companies around the world.
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