Correlation Between Levi Strauss and Oxford Industries
Can any of the company-specific risk be diversified away by investing in both Levi Strauss and Oxford Industries 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 Oxford Industries 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 Oxford Industries, you can compare the effects of market volatilities on Levi Strauss and Oxford Industries 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 Oxford Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and Oxford Industries.
Diversification Opportunities for Levi Strauss and Oxford Industries
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Levi and Oxford is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Oxford Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Industries 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 Oxford Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Industries has no effect on the direction of Levi Strauss i.e., Levi Strauss and Oxford Industries go up and down completely randomly.
Pair Corralation between Levi Strauss and Oxford Industries
Given the investment horizon of 90 days Levi Strauss Co is expected to generate 1.17 times more return on investment than Oxford Industries. However, Levi Strauss is 1.17 times more volatile than Oxford Industries. It trades about 0.02 of its potential returns per unit of risk. Oxford Industries is currently generating about -0.02 per unit of risk. If you would invest 1,528 in Levi Strauss Co on August 27, 2024 and sell it today you would earn a total of 104.00 from holding Levi Strauss Co or generate 6.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Levi Strauss Co vs. Oxford Industries
Performance |
| Timeline |
| Levi Strauss |
| Oxford Industries |
Levi Strauss and Oxford Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levi Strauss and Oxford Industries
The main advantage of trading using opposite Levi Strauss and Oxford Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levi Strauss position performs unexpectedly, Oxford Industries 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 Oxford Industries will offset losses from the drop in Oxford Industries' long position.| Levi Strauss vs. LYFT Inc | Levi Strauss vs. Tapestry | Levi Strauss vs. Capri Holdings | Levi Strauss vs. YETI Holdings |
| Oxford Industries vs. G III Apparel Group | Oxford Industries vs. Ermenegildo Zegna NV | Oxford Industries vs. Kontoor Brands | Oxford Industries vs. Columbia Sportswear |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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