Correlation Between Capri Holdings and Global Battery
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Global Battery 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 Global Battery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Global Battery Metals, you can compare the effects of market volatilities on Capri Holdings and Global Battery 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 Global Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Global Battery.
Diversification Opportunities for Capri Holdings and Global Battery
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capri and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Global Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Battery Metals 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 Global Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Battery Metals has no effect on the direction of Capri Holdings i.e., Capri Holdings and Global Battery go up and down completely randomly.
Pair Corralation between Capri Holdings and Global Battery
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Global Battery. But the stock apears to be less risky and, when comparing its historical volatility, Capri Holdings is 2.64 times less risky than Global Battery. The stock trades about -0.02 of its potential returns per unit of risk. The Global Battery Metals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Global Battery Metals on November 28, 2024 and sell it today you would lose (11.28) from holding Global Battery Metals or give up 86.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Global Battery Metals
Performance |
| Timeline |
| Capri Holdings |
| Global Battery Metals |
Capri Holdings and Global Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Global Battery
The main advantage of trading using opposite Capri Holdings and Global Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Global Battery 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 Global Battery will offset losses from the drop in Global Battery's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Global Battery vs. Altair International Corp | Global Battery vs. Lake Resources NL | Global Battery vs. Jourdan Resources | Global Battery vs. Lomiko Metals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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