Correlation Between Capri Holdings and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and ProShares UltraShort 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 ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and ProShares UltraShort Basic, you can compare the effects of market volatilities on Capri Holdings and ProShares UltraShort 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 ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and ProShares UltraShort.
Diversification Opportunities for Capri Holdings and ProShares UltraShort
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capri and ProShares is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and ProShares UltraShort Basic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort 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 ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of Capri Holdings i.e., Capri Holdings and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Capri Holdings and ProShares UltraShort
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the ProShares UltraShort. In addition to that, Capri Holdings is 1.95 times more volatile than ProShares UltraShort Basic. It trades about -0.26 of its total potential returns per unit of risk. ProShares UltraShort Basic is currently generating about 0.09 per unit of volatility. If you would invest 1,488 in ProShares UltraShort Basic on November 27, 2024 and sell it today you would earn a total of 41.00 from holding ProShares UltraShort Basic or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. ProShares UltraShort Basic
Performance |
| Timeline |
| Capri Holdings |
| ProShares UltraShort |
Capri Holdings and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and ProShares UltraShort
The main advantage of trading using opposite Capri Holdings and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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