Correlation Between Amer Sports, and Levi Strauss

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Can any of the company-specific risk be diversified away by investing in both Amer Sports, 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 Amer Sports, and Levi Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Sports, and Levi Strauss Co, you can compare the effects of market volatilities on Amer Sports, 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 Amer Sports, with a short position of Levi Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Sports, and Levi Strauss.

Diversification Opportunities for Amer Sports, and Levi Strauss

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Amer and Levi is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amer Sports, and Levi Strauss Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levi Strauss and Amer Sports, 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 Amer Sports, 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 Amer Sports, i.e., Amer Sports, and Levi Strauss go up and down completely randomly.

Pair Corralation between Amer Sports, and Levi Strauss

Allowing for the 90-day total investment horizon Amer Sports, is expected to generate 3.76 times more return on investment than Levi Strauss. However, Amer Sports, is 3.76 times more volatile than Levi Strauss Co. It trades about 0.37 of its potential returns per unit of risk. Levi Strauss Co is currently generating about -0.31 per unit of risk. If you would invest  1,798  in Amer Sports, on August 27, 2024 and sell it today you would earn a total of  632.00  from holding Amer Sports, or generate 35.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Amer Sports,  vs.  Levi Strauss Co

 Performance 
       Timeline  
Amer Sports, 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.
Levi Strauss 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 uncertain performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Amer Sports, and Levi Strauss Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amer Sports, and Levi Strauss

The main advantage of trading using opposite Amer Sports, and Levi Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Sports, 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 Amer Sports, 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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