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

0.65

Correlation Coefficient

MYT Netherlands  Capri Holdings

Poor diversification

The 3 months correlation between MYT and Capri is 0.65. 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 under-perform the Capri Holdings. But the stock apears to be less risky and, when comparing its historical volatility, MYT Netherlands Parent is 1.56 times less risky than Capri Holdings. The stock trades about -0.17 of its potential returns per unit of risk. The Capri Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,283  in Capri Holdings on March 3, 2025 and sell it today you would lose (471.00) from holding Capri Holdings or give up 20.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	71.88%
Values	Daily Returns

MYT Netherlands Parent  vs.  Capri Holdings

MYT Netherlands Parent

Risk-Adjusted Performance

Very Weak

Over the last 90 days MYT Netherlands Parent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Capri Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capri Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic 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 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.