Correlation Between Capri Holdings and United Parcel
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and United Parcel 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 United Parcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and United Parcel Service, you can compare the effects of market volatilities on Capri Holdings and United Parcel 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 United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and United Parcel.
Diversification Opportunities for Capri Holdings and United Parcel
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capri and United is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service 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 United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of Capri Holdings i.e., Capri Holdings and United Parcel go up and down completely randomly.
Pair Corralation between Capri Holdings and United Parcel
Given the investment horizon of 90 days Capri Holdings is expected to under-perform the United Parcel. In addition to that, Capri Holdings is 2.92 times more volatile than United Parcel Service. It trades about -0.03 of its total potential returns per unit of risk. United Parcel Service is currently generating about 0.02 per unit of volatility. If you would invest 12,439 in United Parcel Service on September 1, 2024 and sell it today you would earn a total of 387.00 from holding United Parcel Service or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.18% |
| Values | Daily Returns |
Capri Holdings vs. United Parcel Service
Performance |
| Timeline |
| Capri Holdings |
| United Parcel Service |
Capri Holdings and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and United Parcel
The main advantage of trading using opposite Capri Holdings and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| United Parcel vs. ZTO Express | United Parcel vs. Superior Plus Corp | United Parcel vs. Origin Agritech | United Parcel vs. Identiv |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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