Correlation Between Capri Holdings and Minerva SA

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

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

Diversification Opportunities for Capri Holdings and Minerva SA

-0.28

Correlation Coefficient

Capri Holdings  Minerva SA

Very good diversification

The 3 months correlation between Capri and Minerva is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Minerva SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva SA 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 Minerva SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva SA has no effect on the direction of Capri Holdings i.e., Capri Holdings and Minerva SA go up and down completely randomly.

Pair Corralation between Capri Holdings and Minerva SA

Given the investment horizon of 90 days Capri Holdings is expected to generate 21.73 times less return on investment than Minerva SA. But when comparing it to its historical volatility, Capri Holdings is 3.84 times less risky than Minerva SA. It trades about 0.02 of its potential returns per unit of risk. Minerva SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  343.00  in Minerva SA on December 29, 2024 and sell it today you would earn a total of  137.00  from holding Minerva SA or generate 39.94% return on investment over 90 days.

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

Capri Holdings  vs.  Minerva SA

Capri Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capri Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Minerva SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Minerva SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Minerva SA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capri Holdings and Minerva SA

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

The idea behind Capri Holdings and Minerva SA 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.