Correlation Between Capri Holdings and Guararapes Confeces

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

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

Diversification Opportunities for Capri Holdings and Guararapes Confeces

0.57

Correlation Coefficient

Capri Holdings  Guararapes Confeces

Very weak diversification

The 3 months correlation between Capri and Guararapes is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings Limited and Guararapes Confeces SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guararapes Confeces 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 Limited are associated (or correlated) with Guararapes Confeces. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guararapes Confeces has no effect on the direction of Capri Holdings i.e., Capri Holdings and Guararapes Confeces go up and down completely randomly.

Pair Corralation between Capri Holdings and Guararapes Confeces

Assuming the 90 days trading horizon Capri Holdings Limited is expected to generate 0.74 times more return on investment than Guararapes Confeces. However, Capri Holdings Limited is 1.36 times less risky than Guararapes Confeces. It trades about 0.18 of its potential returns per unit of risk. Guararapes Confeces SA is currently generating about 0.02 per unit of risk. If you would invest  8,554  in Capri Holdings Limited on April 23, 2025 and sell it today you would earn a total of  2,050  from holding Capri Holdings Limited or generate 23.97% return on investment over 90 days.

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

Capri Holdings Limited  vs.  Guararapes Confeces SA

Capri Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capri Holdings Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Capri Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Guararapes Confeces

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guararapes Confeces SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Guararapes Confeces is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Capri Holdings and Guararapes Confeces

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

The idea behind Capri Holdings Limited and Guararapes Confeces SA 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.