Correlation Between Capri Holdings and Aksa Enerji

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

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

Diversification Opportunities for Capri Holdings and Aksa Enerji

0.53

Correlation Coefficient

Capri Holdings  Aksa Enerji

Very weak diversification

The 3 months correlation between Capri and Aksa is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings and Aksa Enerji Uretim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aksa Enerji Uretim 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 Aksa Enerji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aksa Enerji Uretim has no effect on the direction of Capri Holdings i.e., Capri Holdings and Aksa Enerji go up and down completely randomly.

Pair Corralation between Capri Holdings and Aksa Enerji

Given the investment horizon of 90 days Capri Holdings is expected to generate 2.19 times more return on investment than Aksa Enerji. However, Capri Holdings is 2.19 times more volatile than Aksa Enerji Uretim. It trades about -0.02 of its potential returns per unit of risk. Aksa Enerji Uretim is currently generating about -0.08 per unit of risk. If you would invest  3,397  in Capri Holdings on September 3, 2024 and sell it today you would lose (1,059) from holding Capri Holdings or give up 31.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.4%
Values	Daily Returns

Capri Holdings  vs.  Aksa Enerji Uretim

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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Aksa Enerji Uretim

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aksa Enerji Uretim has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Capri Holdings and Aksa Enerji

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

The idea behind Capri Holdings and Aksa Enerji Uretim 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.