Correlation Between Capri Holdings and Veru

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

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

Diversification Opportunities for Capri Holdings and Veru

0.5

Correlation Coefficient

Capri Holdings  Veru

Very weak diversification

The 3 months correlation between Capri and Veru is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Veru Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veru Inc 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 Veru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veru Inc has no effect on the direction of Capri Holdings i.e., Capri Holdings and Veru go up and down completely randomly.

Pair Corralation between Capri Holdings and Veru

Given the investment horizon of 90 days Capri Holdings is expected to generate 3.82 times less return on investment than Veru. But when comparing it to its historical volatility, Capri Holdings is 2.65 times less risky than Veru. It trades about 0.02 of its potential returns per unit of risk. Veru Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Veru Inc on December 29, 2024 and sell it today you would lose (9.00) from holding Veru Inc or give up 14.06% of portfolio value over 90 days.

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

Capri Holdings  vs.  Veru Inc

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.

Veru Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Veru Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Veru unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capri Holdings and Veru

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

The idea behind Capri Holdings and Veru Inc 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.