Correlation Between Capri Holdings and VF
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and VF 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 VF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings Limited and VF Corporation, you can compare the effects of market volatilities on Capri Holdings and VF 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 VF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and VF.
Diversification Opportunities for Capri Holdings and VF
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and VF is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings Limited and VF Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VF Corporation 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 Limited are associated (or correlated) with VF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VF Corporation has no effect on the direction of Capri Holdings i.e., Capri Holdings and VF go up and down completely randomly.
Pair Corralation between Capri Holdings and VF
Assuming the 90 days horizon Capri Holdings is expected to generate 6.2 times less return on investment than VF. In addition to that, Capri Holdings is 1.35 times more volatile than VF Corporation. It trades about 0.04 of its total potential returns per unit of risk. VF Corporation is currently generating about 0.29 per unit of volatility. If you would invest 2,022 in VF Corporation on November 10, 2024 and sell it today you would earn a total of 372.00 from holding VF Corporation or generate 18.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings Limited vs. VF Corp.
Performance |
| Timeline |
| Capri Holdings |
| VF Corporation |
Capri Holdings and VF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and VF
The main advantage of trading using opposite Capri Holdings and VF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, VF 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 VF will offset losses from the drop in VF's long position.| Capri Holdings vs. CITY OFFICE REIT | Capri Holdings vs. American Homes 4 | Capri Holdings vs. SANOK RUBBER ZY | Capri Holdings vs. Plastic Omnium |
| VF vs. MagnaChip Semiconductor Corp | VF vs. COLUMBIA SPORTSWEAR | VF vs. Gaztransport Technigaz SA | VF vs. Magnachip Semiconductor |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |