Correlation Between Levi Strauss and Ming Le
Can any of the company-specific risk be diversified away by investing in both Levi Strauss and Ming Le 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 Ming Le 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 Ming Le Sports, you can compare the effects of market volatilities on Levi Strauss and Ming Le 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 Ming Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and Ming Le.
Diversification Opportunities for Levi Strauss and Ming Le
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Levi and Ming is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Ming Le Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Le Sports 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 Ming Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Le Sports has no effect on the direction of Levi Strauss i.e., Levi Strauss and Ming Le go up and down completely randomly.
Pair Corralation between Levi Strauss and Ming Le
Assuming the 90 days trading horizon Levi Strauss Co is expected to generate 2.29 times more return on investment than Ming Le. However, Levi Strauss is 2.29 times more volatile than Ming Le Sports. It trades about -0.05 of its potential returns per unit of risk. Ming Le Sports is currently generating about -0.17 per unit of risk. If you would invest 1,664 in Levi Strauss Co on December 27, 2024 and sell it today you would lose (166.00) from holding Levi Strauss Co or give up 9.98% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Levi Strauss Co vs. Ming Le Sports
Performance |
Timeline |
Levi Strauss |
Ming Le Sports |
Levi Strauss and Ming Le Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Levi Strauss and Ming Le
The main advantage of trading using opposite Levi Strauss and Ming Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levi Strauss position performs unexpectedly, Ming Le 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 Ming Le will offset losses from the drop in Ming Le's long position.Levi Strauss vs. AIR PRODCHEMICALS | Levi Strauss vs. Treasury Wine Estates | Levi Strauss vs. EPSILON HEALTHCARE LTD | Levi Strauss vs. ITALIAN WINE BRANDS |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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