Correlation Between Levi Strauss and Under Armour
Can any of the company-specific risk be diversified away by investing in both Levi Strauss and Under Armour 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 Under Armour 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 Under Armour C, you can compare the effects of market volatilities on Levi Strauss and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and Under Armour.
Diversification Opportunities for Levi Strauss and Under Armour
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Levi and Under is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Levi Strauss i.e., Levi Strauss and Under Armour go up and down completely randomly.
Pair Corralation between Levi Strauss and Under Armour
Given the investment horizon of 90 days Levi Strauss Co is expected to generate 0.89 times more return on investment than Under Armour. However, Levi Strauss Co is 1.12 times less risky than Under Armour. It trades about 0.14 of its potential returns per unit of risk. Under Armour C is currently generating about -0.19 per unit of risk. If you would invest 1,724 in Levi Strauss Co on November 18, 2024 and sell it today you would earn a total of 103.00 from holding Levi Strauss Co or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Levi Strauss Co vs. Under Armour C
Performance |
| Timeline |
| Levi Strauss |
| Under Armour C |
Levi Strauss and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levi Strauss and Under Armour
The main advantage of trading using opposite Levi Strauss and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levi Strauss position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Levi Strauss vs. LYFT Inc | Levi Strauss vs. Tapestry | Levi Strauss vs. Capri Holdings | Levi Strauss vs. YETI Holdings |
| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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