Correlation Between Levi Strauss and Global Partner

Can any of the company-specific risk be diversified away by investing in both Levi Strauss and Global Partner 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 Levi Strauss and Global Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Levi Strauss Co and Global Partner Acq, you can compare the effects of market volatilities on Levi Strauss and Global Partner 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 Levi Strauss with a short position of Global Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and Global Partner.

Diversification Opportunities for Levi Strauss and Global Partner

-0.11

Correlation Coefficient

Levi Strauss  Global Partner

Good diversification

The 3 months correlation between Levi and Global is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Global Partner Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acq and Levi Strauss 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 Levi Strauss Co are associated (or correlated) with Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acq has no effect on the direction of Levi Strauss i.e., Levi Strauss and Global Partner go up and down completely randomly.

Pair Corralation between Levi Strauss and Global Partner

Given the investment horizon of 90 days Levi Strauss Co is expected to generate 2.49 times more return on investment than Global Partner. However, Levi Strauss is 2.49 times more volatile than Global Partner Acq. It trades about 0.02 of its potential returns per unit of risk. Global Partner Acq is currently generating about 0.0 per unit of risk. If you would invest  1,541  in Levi Strauss Co on October 11, 2024 and sell it today you would earn a total of  245.00  from holding Levi Strauss Co or generate 15.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.34%
Values	Daily Returns

Levi Strauss Co  vs.  Global Partner Acq

Levi Strauss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Levi Strauss Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Levi Strauss is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Global Partner Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Partner Acq has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Global Partner is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Levi Strauss and Global Partner

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

The idea behind Levi Strauss Co and Global Partner Acq 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.