Correlation Between Capri Holdings and Bellevue Group

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

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

Diversification Opportunities for Capri Holdings and Bellevue Group

0.78

Correlation Coefficient

Capri Holdings  Bellevue Group

Poor diversification

The 3 months correlation between Capri and Bellevue is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Bellevue Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Group AG 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 Bellevue Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Group AG has no effect on the direction of Capri Holdings i.e., Capri Holdings and Bellevue Group go up and down completely randomly.

Pair Corralation between Capri Holdings and Bellevue Group

Given the investment horizon of 90 days Capri Holdings is expected to generate 2.32 times more return on investment than Bellevue Group. However, Capri Holdings is 2.32 times more volatile than Bellevue Group AG. It trades about 0.23 of its potential returns per unit of risk. Bellevue Group AG is currently generating about -0.65 per unit of risk. If you would invest  2,010  in Capri Holdings on September 2, 2024 and sell it today you would earn a total of  331.00  from holding Capri Holdings or generate 16.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Capri Holdings  vs.  Bellevue Group AG

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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Bellevue Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bellevue Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Capri Holdings and Bellevue Group

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

The idea behind Capri Holdings and Bellevue Group AG 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.