Correlation Between Capri Holdings and Invesco SP
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Invesco SP 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 Invesco SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Invesco SP 500, you can compare the effects of market volatilities on Capri Holdings and Invesco SP 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 Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Invesco SP.
Diversification Opportunities for Capri Holdings and Invesco SP
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capri and Invesco is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 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 Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP 500 has no effect on the direction of Capri Holdings i.e., Capri Holdings and Invesco SP go up and down completely randomly.
Pair Corralation between Capri Holdings and Invesco SP
Given the investment horizon of 90 days Capri Holdings is expected to generate 2.98 times more return on investment than Invesco SP. However, Capri Holdings is 2.98 times more volatile than Invesco SP 500. It trades about 0.26 of its potential returns per unit of risk. Invesco SP 500 is currently generating about 0.37 per unit of risk. If you would invest 1,974 in Capri Holdings on September 1, 2024 and sell it today you would earn a total of 367.00 from holding Capri Holdings or generate 18.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Invesco SP 500
Performance |
| Timeline |
| Capri Holdings |
| Invesco SP 500 |
Capri Holdings and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Invesco SP
The main advantage of trading using opposite Capri Holdings and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Invesco SP 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 Invesco SP will offset losses from the drop in Invesco SP's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Invesco SP vs. Invesco SP 500 | Invesco SP vs. Invesco SP SmallCap | Invesco SP vs. Invesco SP MidCap | Invesco SP vs. Invesco SP MidCap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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