Correlation Between Capri Holdings and St Joe

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

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

Diversification Opportunities for Capri Holdings and St Joe

0.62

Correlation Coefficient

Capri Holdings  St Joe

Poor diversification

The 3 months correlation between Capri and JOE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and St Joe Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Joe Company 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 St Joe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Joe Company has no effect on the direction of Capri Holdings i.e., Capri Holdings and St Joe go up and down completely randomly.

Pair Corralation between Capri Holdings and St Joe

Given the investment horizon of 90 days Capri Holdings is expected to generate 2.73 times less return on investment than St Joe. In addition to that, Capri Holdings is 2.33 times more volatile than St Joe Company. It trades about 0.01 of its total potential returns per unit of risk. St Joe Company is currently generating about 0.07 per unit of volatility. If you would invest  4,462  in St Joe Company on December 27, 2024 and sell it today you would earn a total of  254.00  from holding St Joe Company or generate 5.69% return on investment over 90 days.

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

Capri Holdings  vs.  St Joe Company

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 fairly strong basic indicators, Capri Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

St Joe Company

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in St Joe Company are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, St Joe may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Capri Holdings and St Joe

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

The idea behind Capri Holdings and St Joe Company 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.