Correlation Between Capri Holdings and Vastned Retail

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

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

Diversification Opportunities for Capri Holdings and Vastned Retail

-0.13

Correlation Coefficient

Capri Holdings  Vastned Retail

Good diversification

The 3 months correlation between Capri and Vastned is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Vastned Retail Belgium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail Belgium 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail Belgium has no effect on the direction of Capri Holdings i.e., Capri Holdings and Vastned Retail go up and down completely randomly.

Pair Corralation between Capri Holdings and Vastned Retail

Given the investment horizon of 90 days Capri Holdings is expected to generate 2.18 times less return on investment than Vastned Retail. In addition to that, Capri Holdings is 2.66 times more volatile than Vastned Retail Belgium. It trades about 0.01 of its total potential returns per unit of risk. Vastned Retail Belgium is currently generating about 0.07 per unit of volatility. If you would invest  2,790  in Vastned Retail Belgium on December 30, 2024 and sell it today you would earn a total of  150.00  from holding Vastned Retail Belgium or generate 5.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Capri Holdings  vs.  Vastned Retail Belgium

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.

Vastned Retail Belgium

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vastned Retail Belgium are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Vastned Retail is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Capri Holdings and Vastned Retail

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

The idea behind Capri Holdings and Vastned Retail Belgium 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.