Correlation Between Capri Holdings and Ab Sustainable

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

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

Diversification Opportunities for Capri Holdings and Ab Sustainable

-0.43

Correlation Coefficient

Capri Holdings  Ab Sustainable

Very good diversification

The 3 months correlation between Capri and STHYX is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Ab Sustainable Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Sustainable Thematic 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 Ab Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Sustainable Thematic has no effect on the direction of Capri Holdings i.e., Capri Holdings and Ab Sustainable go up and down completely randomly.

Pair Corralation between Capri Holdings and Ab Sustainable

Given the investment horizon of 90 days Capri Holdings is expected to generate 11.57 times more return on investment than Ab Sustainable. However, Capri Holdings is 11.57 times more volatile than Ab Sustainable Thematic. It trades about 0.01 of its potential returns per unit of risk. Ab Sustainable Thematic is currently generating about 0.08 per unit of risk. If you would invest  2,052  in Capri Holdings on December 28, 2024 and sell it today you would lose (22.00) from holding Capri Holdings or give up 1.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Capri Holdings  vs.  Ab Sustainable Thematic

Capri Holdings

Risk-Adjusted Performance

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.

Ab Sustainable Thematic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Sustainable Thematic are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Sustainable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Capri Holdings and Ab Sustainable

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

The idea behind Capri Holdings and Ab Sustainable Thematic 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.