Correlation Between Capri Holdings and Sit Small
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Sit Small 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 Sit Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Sit Small Cap, you can compare the effects of market volatilities on Capri Holdings and Sit Small 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 Sit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Sit Small.
Diversification Opportunities for Capri Holdings and Sit Small
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and Sit is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Sit Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Small Cap 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 Sit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Small Cap has no effect on the direction of Capri Holdings i.e., Capri Holdings and Sit Small go up and down completely randomly.
Pair Corralation between Capri Holdings and Sit Small
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Sit Small. In addition to that, Capri Holdings is 3.89 times more volatile than Sit Small Cap. It trades about -0.03 of its total potential returns per unit of risk. Sit Small Cap is currently generating about 0.02 per unit of volatility. If you would invest 1,613 in Sit Small Cap on November 28, 2024 and sell it today you would earn a total of 60.00 from holding Sit Small Cap or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.46% |
| Values | Daily Returns |
Capri Holdings vs. Sit Small Cap
Performance |
| Timeline |
| Capri Holdings |
| Sit Small Cap |
Capri Holdings and Sit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Sit Small
The main advantage of trading using opposite Capri Holdings and Sit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Sit Small 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 Sit Small will offset losses from the drop in Sit Small's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Sit Small vs. Multimanager Lifestyle Growth | Sit Small vs. Profunds Large Cap Growth | Sit Small vs. Ab Centrated International | Sit Small vs. T Rowe Price |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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