Correlation Between Capri Holdings and Bolt Biotherapeutics

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

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

Diversification Opportunities for Capri Holdings and Bolt Biotherapeutics

-0.08

Correlation Coefficient

Capri Holdings  Bolt Biotherapeutics

Good diversification

The 3 months correlation between Capri and Bolt is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Bolt Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolt Biotherapeutics 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 Bolt Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolt Biotherapeutics has no effect on the direction of Capri Holdings i.e., Capri Holdings and Bolt Biotherapeutics go up and down completely randomly.

Pair Corralation between Capri Holdings and Bolt Biotherapeutics

Given the investment horizon of 90 days Capri Holdings is expected to generate 0.88 times more return on investment than Bolt Biotherapeutics. However, Capri Holdings is 1.14 times less risky than Bolt Biotherapeutics. It trades about -0.07 of its potential returns per unit of risk. Bolt Biotherapeutics is currently generating about -0.12 per unit of risk. If you would invest  2,341  in Capri Holdings on November 28, 2024 and sell it today you would lose (313.00) from holding Capri Holdings or give up 13.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Capri Holdings  vs.  Bolt Biotherapeutics

Capri Holdings

Risk-Adjusted Performance

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

Bolt Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bolt Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Capri Holdings and Bolt Biotherapeutics

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

The idea behind Capri Holdings and Bolt Biotherapeutics 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.