Correlation Between Playa Hotels and Levi Strauss
Can any of the company-specific risk be diversified away by investing in both Playa Hotels 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 Playa Hotels and Levi Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playa Hotels Resorts and Levi Strauss Co, you can compare the effects of market volatilities on Playa Hotels 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 Playa Hotels with a short position of Levi Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playa Hotels and Levi Strauss.
Diversification Opportunities for Playa Hotels and Levi Strauss
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Playa and Levi is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Playa Hotels Resorts and Levi Strauss Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levi Strauss and Playa Hotels 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 Playa Hotels Resorts 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 Playa Hotels i.e., Playa Hotels and Levi Strauss go up and down completely randomly.
Pair Corralation between Playa Hotels and Levi Strauss
Assuming the 90 days horizon Playa Hotels Resorts is expected to generate 0.99 times more return on investment than Levi Strauss. However, Playa Hotels Resorts is 1.01 times less risky than Levi Strauss. It trades about 0.06 of its potential returns per unit of risk. Levi Strauss Co is currently generating about 0.03 per unit of risk. If you would invest 640.00 in Playa Hotels Resorts on October 11, 2024 and sell it today you would earn a total of 530.00 from holding Playa Hotels Resorts or generate 82.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Playa Hotels Resorts vs. Levi Strauss Co
Performance |
Timeline |
Playa Hotels Resorts |
Levi Strauss |
Playa Hotels and Levi Strauss Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Playa Hotels and Levi Strauss
The main advantage of trading using opposite Playa Hotels and Levi Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playa Hotels 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.Playa Hotels vs. DEVRY EDUCATION GRP | Playa Hotels vs. Laureate Education | Playa Hotels vs. EVS Broadcast Equipment | Playa Hotels vs. COPLAND ROAD CAPITAL |
Levi Strauss vs. Sunstone Hotel Investors | Levi Strauss vs. Playa Hotels Resorts | Levi Strauss vs. DeVry Education Group | Levi Strauss vs. INTERCONT HOTELS |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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