Correlation Between Levi Strauss and Bosideng International
Can any of the company-specific risk be diversified away by investing in both Levi Strauss and Bosideng International 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 Bosideng International 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 Bosideng International Holdings, you can compare the effects of market volatilities on Levi Strauss and Bosideng International 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 Bosideng International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and Bosideng International.
Diversification Opportunities for Levi Strauss and Bosideng International
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Levi and Bosideng is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Bosideng International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosideng 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 Bosideng International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosideng International has no effect on the direction of Levi Strauss i.e., Levi Strauss and Bosideng International go up and down completely randomly.
Pair Corralation between Levi Strauss and Bosideng International
Assuming the 90 days trading horizon Levi Strauss Co is expected to under-perform the Bosideng International. But the stock apears to be less risky and, when comparing its historical volatility, Levi Strauss Co is 1.26 times less risky than Bosideng International. The stock trades about -0.04 of its potential returns per unit of risk. The Bosideng International Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Bosideng International Holdings on December 29, 2024 and sell it today you would lose (1.00) from holding Bosideng International Holdings or give up 2.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
Levi Strauss Co vs. Bosideng International Holding
Performance |
Timeline |
Levi Strauss |
Bosideng International |
Levi Strauss and Bosideng International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Levi Strauss and Bosideng International
The main advantage of trading using opposite Levi Strauss and Bosideng International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levi Strauss position performs unexpectedly, Bosideng International 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 Bosideng International will offset losses from the drop in Bosideng International's long position.Levi Strauss vs. COSTCO WHOLESALE CDR | Levi Strauss vs. PICKN PAY STORES | Levi Strauss vs. SLR Investment Corp | Levi Strauss vs. CDL INVESTMENT |
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Check out your portfolio center.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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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