Correlation Between Lanvin Group and Capri Holdings
Can any of the company-specific risk be diversified away by investing in both Lanvin Group and Capri Holdings 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 Lanvin Group and Capri Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lanvin Group Holdings and Capri Holdings, you can compare the effects of market volatilities on Lanvin Group and Capri Holdings 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 Lanvin Group with a short position of Capri Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lanvin Group and Capri Holdings.
Diversification Opportunities for Lanvin Group and Capri Holdings
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lanvin and Capri is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lanvin Group Holdings and Capri Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capri Holdings and Lanvin Group 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 Lanvin Group Holdings are associated (or correlated) with Capri Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capri Holdings has no effect on the direction of Lanvin Group i.e., Lanvin Group and Capri Holdings go up and down completely randomly.
Pair Corralation between Lanvin Group and Capri Holdings
Given the investment horizon of 90 days Lanvin Group Holdings is expected to under-perform the Capri Holdings. In addition to that, Lanvin Group is 1.32 times more volatile than Capri Holdings. It trades about -0.03 of its total potential returns per unit of risk. Capri Holdings is currently generating about -0.01 per unit of volatility. If you would invest 3,569 in Capri Holdings on August 27, 2024 and sell it today you would lose (1,521) from holding Capri Holdings or give up 42.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lanvin Group Holdings vs. Capri Holdings
Performance |
| Timeline |
| Lanvin Group Holdings |
| Capri Holdings |
Lanvin Group and Capri Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lanvin Group and Capri Holdings
The main advantage of trading using opposite Lanvin Group and Capri Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanvin Group position performs unexpectedly, Capri Holdings 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 Capri Holdings will offset losses from the drop in Capri Holdings' long position.| Lanvin Group vs. Fossil Group | Lanvin Group vs. Signet Jewelers | Lanvin Group vs. Tapestry | Lanvin Group vs. Capri Holdings |
| Capri Holdings vs. Movado Group | Capri Holdings vs. Signet Jewelers | Capri Holdings vs. Lanvin Group Holdings | Capri Holdings vs. TheRealReal |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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