Correlation Between Capri Holdings and Schwab Strategic

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

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

Diversification Opportunities for Capri Holdings and Schwab Strategic

-0.65

Correlation Coefficient

Capri Holdings  Schwab Strategic

Excellent diversification

The 3 months correlation between Capri and Schwab is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Schwab Strategic Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Strategic Trust 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 Schwab Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Strategic Trust has no effect on the direction of Capri Holdings i.e., Capri Holdings and Schwab Strategic go up and down completely randomly.

Pair Corralation between Capri Holdings and Schwab Strategic

Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Schwab Strategic. In addition to that, Capri Holdings is 184.43 times more volatile than Schwab Strategic Trust. It trades about -0.05 of its total potential returns per unit of risk. Schwab Strategic Trust is currently generating about 0.47 per unit of volatility. If you would invest  2,489  in Schwab Strategic Trust on September 1, 2024 and sell it today you would earn a total of  28.00  from holding Schwab Strategic Trust or generate 1.12% return on investment over 90 days.

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

Capri Holdings  vs.  Schwab Strategic Trust

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.

Schwab Strategic Trust

Risk-Adjusted Performance

37 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Schwab Strategic Trust are ranked lower than 37 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Schwab Strategic is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Capri Holdings and Schwab Strategic

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

The idea behind Capri Holdings and Schwab Strategic Trust 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.