Correlation Between CVC Brasil and Capri Holdings

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

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

Diversification Opportunities for CVC Brasil and Capri Holdings

0.7

Correlation Coefficient

CVC Brasil  Capri Holdings

Poor diversification

The 3 months correlation between CVC and Capri is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CVC Brasil Operadora and Capri Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capri Holdings and CVC Brasil 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 CVC Brasil Operadora 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 CVC Brasil i.e., CVC Brasil and Capri Holdings go up and down completely randomly.

Pair Corralation between CVC Brasil and Capri Holdings

Assuming the 90 days trading horizon CVC Brasil is expected to generate 1.5 times less return on investment than Capri Holdings. In addition to that, CVC Brasil is 2.14 times more volatile than Capri Holdings Limited. It trades about 0.09 of its total potential returns per unit of risk. Capri Holdings Limited is currently generating about 0.28 per unit of volatility. If you would invest  9,808  in Capri Holdings Limited on April 20, 2025 and sell it today you would earn a total of  796.00  from holding Capri Holdings Limited or generate 8.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

CVC Brasil Operadora  vs.  Capri Holdings Limited

CVC Brasil Operadora

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CVC Brasil Operadora are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, CVC Brasil may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

Pair Trading with CVC Brasil and Capri Holdings

The main advantage of trading using opposite CVC Brasil and Capri Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVC Brasil 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 CVC Brasil Operadora and Capri Holdings Limited 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.