Correlation Between Capri Holdings and Si Bone

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

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

Diversification Opportunities for Capri Holdings and Si Bone

0.08

Correlation Coefficient

Capri Holdings  Si Bone

Significant diversification

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

Pair Corralation between Capri Holdings and Si Bone

Given the investment horizon of 90 days Capri Holdings is expected to under-perform the Si Bone. But the stock apears to be less risky and, when comparing its historical volatility, Capri Holdings is 1.23 times less risky than Si Bone. The stock trades about -0.07 of its potential returns per unit of risk. The Si Bone is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,327  in Si Bone on November 27, 2024 and sell it today you would earn a total of  514.00  from holding Si Bone or generate 38.73% return on investment over 90 days.

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

Capri Holdings  vs.  Si Bone

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.

Si Bone

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Si Bone are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Si Bone displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capri Holdings and Si Bone

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

The idea behind Capri Holdings and Si Bone 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.