Correlation Between Malaga Financial and Levi Strauss

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

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

Diversification Opportunities for Malaga Financial and Levi Strauss

0.07

Correlation Coefficient

Malaga Financial  Levi Strauss

Significant diversification

The 3 months correlation between Malaga and Levi is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Malaga Financial and Levi Strauss Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levi Strauss and Malaga Financial 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 Malaga Financial are associated (or correlated) with Levi Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levi Strauss has no effect on the direction of Malaga Financial i.e., Malaga Financial and Levi Strauss go up and down completely randomly.

Pair Corralation between Malaga Financial and Levi Strauss

Given the investment horizon of 90 days Malaga Financial is expected to under-perform the Levi Strauss. But the pink sheet apears to be less risky and, when comparing its historical volatility, Malaga Financial is 1.32 times less risky than Levi Strauss. The pink sheet trades about -0.39 of its potential returns per unit of risk. The Levi Strauss Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,747  in Levi Strauss Co on October 26, 2024 and sell it today you would lose (2.00) from holding Levi Strauss Co or give up 0.11% of portfolio value over 90 days.

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

Malaga Financial  vs.  Levi Strauss Co

Malaga Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Malaga Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Malaga Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Levi Strauss

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Malaga Financial and Levi Strauss

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

The idea behind Malaga Financial and Levi Strauss Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.