Correlation Between Capri Holdings and Schulz SA
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Schulz SA 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 Schulz SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Schulz SA, you can compare the effects of market volatilities on Capri Holdings and Schulz SA 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 Schulz SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Schulz SA.
Diversification Opportunities for Capri Holdings and Schulz SA
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and Schulz is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Schulz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schulz SA 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 Schulz SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schulz SA has no effect on the direction of Capri Holdings i.e., Capri Holdings and Schulz SA go up and down completely randomly.
Pair Corralation between Capri Holdings and Schulz SA
Given the investment horizon of 90 days Capri Holdings is expected to generate 2.05 times more return on investment than Schulz SA. However, Capri Holdings is 2.05 times more volatile than Schulz SA. It trades about 0.23 of its potential returns per unit of risk. Schulz SA is currently generating about -0.27 per unit of risk. If you would invest 2,010 in Capri Holdings on September 2, 2024 and sell it today you would earn a total of 331.00 from holding Capri Holdings or generate 16.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Capri Holdings vs. Schulz SA
Performance |
| Timeline |
| Capri Holdings |
| Schulz SA |
Capri Holdings and Schulz SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Schulz SA
The main advantage of trading using opposite Capri Holdings and Schulz SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Schulz SA 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 Schulz SA will offset losses from the drop in Schulz SA's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Schulz SA vs. Fras le SA | Schulz SA vs. PBG SA | Schulz SA vs. Springs Global Participaes | Schulz SA vs. Indstrias Romi SA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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