Correlation Between Capri Holdings and Xcel Brands
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Xcel Brands 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 Xcel Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings and Xcel Brands, you can compare the effects of market volatilities on Capri Holdings and Xcel Brands 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 Xcel Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Xcel Brands.
Diversification Opportunities for Capri Holdings and Xcel Brands
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capri and Xcel is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Xcel Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Brands 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 Xcel Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xcel Brands has no effect on the direction of Capri Holdings i.e., Capri Holdings and Xcel Brands go up and down completely randomly.
Pair Corralation between Capri Holdings and Xcel Brands
Given the investment horizon of 90 days Capri Holdings is expected to generate 0.52 times more return on investment than Xcel Brands. However, Capri Holdings is 1.92 times less risky than Xcel Brands. It trades about 0.1 of its potential returns per unit of risk. Xcel Brands is currently generating about -0.46 per unit of risk. If you would invest 2,004 in Capri Holdings on September 21, 2024 and sell it today you would earn a total of 106.00 from holding Capri Holdings or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings vs. Xcel Brands
Performance |
| Timeline |
| Capri Holdings |
| Xcel Brands |
Capri Holdings and Xcel Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Xcel Brands
The main advantage of trading using opposite Capri Holdings and Xcel Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Xcel Brands 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 Xcel Brands will offset losses from the drop in Xcel Brands' long position.| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
| Xcel Brands vs. H M Hennes | Xcel Brands vs. Under Armour C | Xcel Brands vs. H M Hennes | Xcel Brands vs. Oxford Industries |
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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