Correlation Between Capri Holdings and TESCO PLC
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and TESCO PLC 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 TESCO PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and TESCO PLC ADR1, you can compare the effects of market volatilities on Capri Holdings and TESCO PLC 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 TESCO PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and TESCO PLC.
Diversification Opportunities for Capri Holdings and TESCO PLC
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capri and TESCO is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and TESCO PLC ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TESCO PLC ADR1 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 TESCO PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TESCO PLC ADR1 has no effect on the direction of Capri Holdings i.e., Capri Holdings and TESCO PLC go up and down completely randomly.
Pair Corralation between Capri Holdings and TESCO PLC
Given the investment horizon of 90 days Capri Holdings is expected to generate 1.47 times more return on investment than TESCO PLC. However, Capri Holdings is 1.47 times more volatile than TESCO PLC ADR1. It trades about 0.26 of its potential returns per unit of risk. TESCO PLC ADR1 is currently generating about 0.12 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 Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Capri Holdings vs. TESCO PLC ADR1
Performance |
| Timeline |
| Capri Holdings |
| TESCO PLC ADR1 |
Capri Holdings and TESCO PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and TESCO PLC
The main advantage of trading using opposite Capri Holdings and TESCO PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, TESCO PLC 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 TESCO PLC will offset losses from the drop in TESCO PLC's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| TESCO PLC vs. TESCO PLC LS 0633333 | TESCO PLC vs. Superior Plus Corp | TESCO PLC vs. NMI Holdings | TESCO PLC vs. Origin Agritech |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |