Correlation Between Capri Holdings and Investor

Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Investor 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 Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capri Holdings and Investor AB ser, you can compare the effects of market volatilities on Capri Holdings and Investor 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 Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Investor.

Diversification Opportunities for Capri Holdings and Investor

0.54

Correlation Coefficient

Capri Holdings  Investor

Very weak diversification

The 3 months correlation between Capri and Investor is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser 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 Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Capri Holdings i.e., Capri Holdings and Investor go up and down completely randomly.

Pair Corralation between Capri Holdings and Investor

Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Investor. In addition to that, Capri Holdings is 7.75 times more volatile than Investor AB ser. It trades about -0.05 of its total potential returns per unit of risk. Investor AB ser is currently generating about -0.04 per unit of volatility. If you would invest  30,430  in Investor AB ser on August 31, 2024 and sell it today you would lose (820.00) from holding Investor AB ser or give up 2.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Capri Holdings  vs.  Investor AB ser

Capri Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capri Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Investor AB ser

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Investor AB ser has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Investor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Capri Holdings and Investor

The main advantage of trading using opposite Capri Holdings and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor's long position.

The idea behind Capri Holdings and Investor AB ser pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.