Correlation Between Capri Holdings and FDO INV
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and FDO INV 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 FDO INV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and FDO INV Imob, you can compare the effects of market volatilities on Capri Holdings and FDO INV 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 FDO INV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and FDO INV.
Diversification Opportunities for Capri Holdings and FDO INV
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and FDO is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and FDO INV Imob in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDO INV Imob 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 FDO INV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDO INV Imob has no effect on the direction of Capri Holdings i.e., Capri Holdings and FDO INV go up and down completely randomly.
Pair Corralation between Capri Holdings and FDO INV
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the FDO INV. In addition to that, Capri Holdings is 2.64 times more volatile than FDO INV Imob. It trades about -0.01 of its total potential returns per unit of risk. FDO INV Imob is currently generating about 0.04 per unit of volatility. If you would invest 68,477 in FDO INV Imob on September 2, 2024 and sell it today you would earn a total of 13,523 from holding FDO INV Imob or generate 19.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Capri Holdings vs. FDO INV Imob
Performance |
| Timeline |
| Capri Holdings |
| FDO INV Imob |
Capri Holdings and FDO INV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and FDO INV
The main advantage of trading using opposite Capri Holdings and FDO INV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, FDO INV 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 FDO INV will offset losses from the drop in FDO INV's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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