Correlation Between MYT Netherlands and Capri Holdings

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

By analyzing existing cross correlation between MYT Netherlands Parent and Capri Holdings, you can compare the effects of market volatilities on MYT Netherlands and Capri Holdings 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 MYT Netherlands with a short position of Capri Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYT Netherlands and Capri Holdings.

Diversification Opportunities for MYT Netherlands and Capri Holdings

-0.35

Correlation Coefficient

MYT Netherlands  Capri Holdings

Very good diversification

The 3 months correlation between MYT and Capri is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and Capri Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capri Holdings and MYT Netherlands 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 MYT Netherlands Parent are associated (or correlated) with Capri Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capri Holdings has no effect on the direction of MYT Netherlands i.e., MYT Netherlands and Capri Holdings go up and down completely randomly.

Pair Corralation between MYT Netherlands and Capri Holdings

Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 1.22 times more return on investment than Capri Holdings. However, MYT Netherlands is 1.22 times more volatile than Capri Holdings. It trades about 0.15 of its potential returns per unit of risk. Capri Holdings is currently generating about -0.05 per unit of risk. If you would invest  373.00  in MYT Netherlands Parent on August 30, 2024 and sell it today you would earn a total of  305.00  from holding MYT Netherlands Parent or generate 81.77% return on investment over 90 days.

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

MYT Netherlands Parent  vs.  Capri Holdings

MYT Netherlands Parent

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, MYT Netherlands exhibited solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with MYT Netherlands and Capri Holdings

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

The idea behind MYT Netherlands Parent and Capri Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.