Correlation Between Levi Strauss and SUPER HI

Can any of the company-specific risk be diversified away by investing in both Levi Strauss and SUPER HI 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 SUPER HI 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 SUPER HI INTERNATIONAL, you can compare the effects of market volatilities on Levi Strauss and SUPER HI 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 SUPER HI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and SUPER HI.

Diversification Opportunities for Levi Strauss and SUPER HI

-0.12

Correlation Coefficient

Levi Strauss  SUPER HI

Good diversification

The 3 months correlation between Levi and SUPER is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and SUPER HI INTERNATIONAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUPER HI INTERNATIONAL 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 SUPER HI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUPER HI INTERNATIONAL has no effect on the direction of Levi Strauss i.e., Levi Strauss and SUPER HI go up and down completely randomly.

Pair Corralation between Levi Strauss and SUPER HI

Given the investment horizon of 90 days Levi Strauss is expected to generate 16.6 times less return on investment than SUPER HI. But when comparing it to its historical volatility, Levi Strauss Co is 2.35 times less risky than SUPER HI. It trades about 0.03 of its potential returns per unit of risk. SUPER HI INTERNATIONAL is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,441  in SUPER HI INTERNATIONAL on October 9, 2024 and sell it today you would earn a total of  340.00  from holding SUPER HI INTERNATIONAL or generate 13.93% return on investment over 90 days.

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

Levi Strauss Co  vs.  SUPER HI INTERNATIONAL

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.

SUPER HI INTERNATIONAL

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SUPER HI INTERNATIONAL are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, SUPER HI disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Levi Strauss and SUPER HI

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

The idea behind Levi Strauss Co and SUPER HI INTERNATIONAL 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.