Correlation Between Prada SpA and Capri Holdings
Can any of the company-specific risk be diversified away by investing in both Prada SpA 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 Prada SpA and Capri Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prada SpA and Capri Holdings, you can compare the effects of market volatilities on Prada SpA 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 Prada SpA with a short position of Capri Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prada SpA and Capri Holdings.
Diversification Opportunities for Prada SpA and Capri Holdings
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Prada and Capri is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Prada SpA and Capri Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capri Holdings and Prada SpA 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 Prada SpA 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 Prada SpA i.e., Prada SpA and Capri Holdings go up and down completely randomly.
Pair Corralation between Prada SpA and Capri Holdings
Assuming the 90 days horizon Prada SpA is expected to under-perform the Capri Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Prada SpA is 2.03 times less risky than Capri Holdings. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Capri Holdings is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,061 in Capri Holdings on November 3, 2024 and sell it today you would earn a total of 417.00 from holding Capri Holdings or generate 20.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Prada SpA vs. Capri Holdings
Performance |
| Timeline |
| Prada SpA |
| Capri Holdings |
Prada SpA and Capri Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prada SpA and Capri Holdings
The main advantage of trading using opposite Prada SpA and Capri Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prada SpA 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.| Prada SpA vs. Compagnie Financiere Richemont | Prada SpA vs. Kering SA | Prada SpA vs. Burberry Group Plc | Prada SpA vs. Swatch Group AG |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Transaction History View history of all your transactions and understand their impact on performance |