Correlation Between Capri Holdings and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and TotalEnergies 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 TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and TotalEnergies SE, you can compare the effects of market volatilities on Capri Holdings and TotalEnergies 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 TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and TotalEnergies.
Diversification Opportunities for Capri Holdings and TotalEnergies
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and TotalEnergies is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of Capri Holdings i.e., Capri Holdings and TotalEnergies go up and down completely randomly.
Pair Corralation between Capri Holdings and TotalEnergies
Given the investment horizon of 90 days Capri Holdings is expected to generate 2.46 times more return on investment than TotalEnergies. However, Capri Holdings is 2.46 times more volatile than TotalEnergies SE. It trades about 0.19 of its potential returns per unit of risk. TotalEnergies SE is currently generating about -0.31 per unit of risk. If you would invest 2,048 in Capri Holdings on August 30, 2024 and sell it today you would earn a total of 304.00 from holding Capri Holdings or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. TotalEnergies SE
Performance |
| Timeline |
| Capri Holdings |
| TotalEnergies SE |
Capri Holdings and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and TotalEnergies
The main advantage of trading using opposite Capri Holdings and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| TotalEnergies vs. Astral Foods Limited | TotalEnergies vs. CAL MAINE FOODS | TotalEnergies vs. LIFEWAY FOODS | TotalEnergies vs. WisdomTree Investments |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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