Correlation Between Levi Strauss and Moncler SpA

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

Diversification Opportunities for Levi Strauss and Moncler SpA

0.59

Correlation Coefficient

Levi Strauss  Moncler SpA

Very weak diversification

The 3 months correlation between Levi and Moncler is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA 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 Moncler SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moncler SpA has no effect on the direction of Levi Strauss i.e., Levi Strauss and Moncler SpA go up and down completely randomly.

Pair Corralation between Levi Strauss and Moncler SpA

Assuming the 90 days trading horizon Levi Strauss Co is expected to under-perform the Moncler SpA. In addition to that, Levi Strauss is 1.28 times more volatile than Moncler SpA. It trades about -0.07 of its total potential returns per unit of risk. Moncler SpA is currently generating about -0.05 per unit of volatility. If you would invest  5,834  in Moncler SpA on September 24, 2024 and sell it today you would lose (818.00) from holding Moncler SpA or give up 14.02% of portfolio value over 90 days.

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

Levi Strauss Co  vs.  Moncler SpA

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Moncler SpA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Moncler SpA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Moncler SpA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Levi Strauss and Moncler SpA

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

The idea behind Levi Strauss Co and Moncler SpA 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.