Correlation Between Hanesbrands and Levi Strauss
Can any of the company-specific risk be diversified away by investing in both Hanesbrands 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 Hanesbrands and Levi Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanesbrands and Levi Strauss Co, you can compare the effects of market volatilities on Hanesbrands 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 Hanesbrands with a short position of Levi Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanesbrands and Levi Strauss.
Diversification Opportunities for Hanesbrands and Levi Strauss
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hanesbrands and Levi is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hanesbrands and Levi Strauss Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levi Strauss and Hanesbrands 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 Hanesbrands 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 Hanesbrands i.e., Hanesbrands and Levi Strauss go up and down completely randomly.
Pair Corralation between Hanesbrands and Levi Strauss
Considering the 90-day investment horizon Hanesbrands is expected to generate 1.58 times more return on investment than Levi Strauss. However, Hanesbrands is 1.58 times more volatile than Levi Strauss Co. It trades about 0.14 of its potential returns per unit of risk. Levi Strauss Co is currently generating about -0.11 per unit of risk. If you would invest 478.00 in Hanesbrands on August 24, 2024 and sell it today you would earn a total of 341.00 from holding Hanesbrands or generate 71.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanesbrands vs. Levi Strauss Co
Performance |
| Timeline |
| Hanesbrands |
| Levi Strauss |
Hanesbrands and Levi Strauss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanesbrands and Levi Strauss
The main advantage of trading using opposite Hanesbrands and Levi Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanesbrands 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.| Hanesbrands vs. Ralph Lauren Corp | Hanesbrands vs. Levi Strauss Co | Hanesbrands vs. Under Armour C | Hanesbrands vs. PVH Corp |
| Levi Strauss vs. LYFT Inc | Levi Strauss vs. Tapestry | Levi Strauss vs. Capri Holdings | Levi Strauss vs. YETI Holdings |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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