Correlation Between Capri Holdings and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Federated Strategic 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 Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Federated Strategic Value, you can compare the effects of market volatilities on Capri Holdings and Federated Strategic 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 Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Federated Strategic.
Diversification Opportunities for Capri Holdings and Federated Strategic
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capri and Federated is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value 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 Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic Value has no effect on the direction of Capri Holdings i.e., Capri Holdings and Federated Strategic go up and down completely randomly.
Pair Corralation between Capri Holdings and Federated Strategic
Given the investment horizon of 90 days Capri Holdings is expected to generate 7.07 times more return on investment than Federated Strategic. However, Capri Holdings is 7.07 times more volatile than Federated Strategic Value. It trades about 0.26 of its potential returns per unit of risk. Federated Strategic Value is currently generating about 0.21 per unit of risk. If you would invest 1,974 in Capri Holdings on September 1, 2024 and sell it today you would earn a total of 367.00 from holding Capri Holdings or generate 18.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Capri Holdings vs. Federated Strategic Value
Performance |
| Timeline |
| Capri Holdings |
| Federated Strategic Value |
Capri Holdings and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Federated Strategic
The main advantage of trading using opposite Capri Holdings and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Federated Strategic vs. Federated Emerging Market | Federated Strategic vs. Federated Mdt All | Federated Strategic vs. Federated Mdt Balanced | Federated Strategic vs. Federated Global Allocation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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