Correlation Between Capri Holdings and Retailing Fund
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Retailing Fund 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 Retailing Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Retailing Fund Investor, you can compare the effects of market volatilities on Capri Holdings and Retailing Fund 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 Retailing Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Retailing Fund.
Diversification Opportunities for Capri Holdings and Retailing Fund
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and Retailing is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Retailing Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailing Fund Investor 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 Retailing Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailing Fund Investor has no effect on the direction of Capri Holdings i.e., Capri Holdings and Retailing Fund go up and down completely randomly.
Pair Corralation between Capri Holdings and Retailing Fund
Given the investment horizon of 90 days Capri Holdings is expected to generate 4.06 times more return on investment than Retailing Fund. However, Capri Holdings is 4.06 times more volatile than Retailing Fund Investor. It trades about 0.19 of its potential returns per unit of risk. Retailing Fund Investor is currently generating about 0.32 per unit of risk. If you would invest 2,048 in Capri Holdings on August 30, 2024 and sell it today you would earn a total of 304.00 from holding Capri Holdings or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Capri Holdings vs. Retailing Fund Investor
Performance |
| Timeline |
| Capri Holdings |
| Retailing Fund Investor |
Capri Holdings and Retailing Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Retailing Fund
The main advantage of trading using opposite Capri Holdings and Retailing Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Retailing Fund 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 Retailing Fund will offset losses from the drop in Retailing Fund's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Retailing Fund vs. Leisure Fund Investor | Retailing Fund vs. Banking Fund Investor | Retailing Fund vs. Technology Fund Investor | Retailing Fund vs. Financial Services Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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