Correlation Between Capri Holdings and Solstice Gold
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Solstice Gold 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 Solstice Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Solstice Gold Corp, you can compare the effects of market volatilities on Capri Holdings and Solstice Gold 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 Solstice Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Solstice Gold.
Diversification Opportunities for Capri Holdings and Solstice Gold
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and Solstice is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Solstice Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstice Gold Corp 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 Solstice Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstice Gold Corp has no effect on the direction of Capri Holdings i.e., Capri Holdings and Solstice Gold go up and down completely randomly.
Pair Corralation between Capri Holdings and Solstice Gold
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Solstice Gold. But the stock apears to be less risky and, when comparing its historical volatility, Capri Holdings is 7.13 times less risky than Solstice Gold. The stock trades about -0.03 of its potential returns per unit of risk. The Solstice Gold Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Solstice Gold Corp on August 29, 2024 and sell it today you would lose (3.11) from holding Solstice Gold Corp or give up 62.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Solstice Gold Corp
Performance |
| Timeline |
| Capri Holdings |
| Solstice Gold Corp |
Capri Holdings and Solstice Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Solstice Gold
The main advantage of trading using opposite Capri Holdings and Solstice Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Solstice Gold 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 Solstice Gold will offset losses from the drop in Solstice Gold's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Solstice Gold vs. Vertiv Holdings Co | Solstice Gold vs. Nasdaq Inc | Solstice Gold vs. McDonalds | Solstice Gold vs. Walmart |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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