Correlation Between Vista Outdoor and Capri Holdings
Can any of the company-specific risk be diversified away by investing in both Vista Outdoor 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 Vista Outdoor and Capri Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Outdoor and Capri Holdings, you can compare the effects of market volatilities on Vista Outdoor 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 Vista Outdoor with a short position of Capri Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Outdoor and Capri Holdings.
Diversification Opportunities for Vista Outdoor and Capri Holdings
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vista and Capri is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Vista Outdoor and Capri Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capri Holdings and Vista Outdoor 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 Vista Outdoor 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 Vista Outdoor i.e., Vista Outdoor and Capri Holdings go up and down completely randomly.
Pair Corralation between Vista Outdoor and Capri Holdings
Given the investment horizon of 90 days Vista Outdoor is expected to generate 0.23 times more return on investment than Capri Holdings. However, Vista Outdoor is 4.41 times less risky than Capri Holdings. It trades about 0.15 of its potential returns per unit of risk. Capri Holdings is currently generating about -0.05 per unit of risk. If you would invest 3,905 in Vista Outdoor on August 31, 2024 and sell it today you would earn a total of 558.00 from holding Vista Outdoor or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Vista Outdoor vs. Capri Holdings
Performance |
| Timeline |
| Vista Outdoor |
| Capri Holdings |
Vista Outdoor and Capri Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Outdoor and Capri Holdings
The main advantage of trading using opposite Vista Outdoor and Capri Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Outdoor 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.| Vista Outdoor vs. Clarus Corp | Vista Outdoor vs. Johnson Outdoors | Vista Outdoor vs. Escalade Incorporated | Vista Outdoor vs. JAKKS Pacific |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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