Correlation Between Levi Strauss and Xcel Brands
Can any of the company-specific risk be diversified away by investing in both Levi Strauss and Xcel Brands 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 Xcel Brands 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 Xcel Brands, you can compare the effects of market volatilities on Levi Strauss and Xcel Brands 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 Xcel Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and Xcel Brands.
Diversification Opportunities for Levi Strauss and Xcel Brands
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Levi and Xcel is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Xcel Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Brands 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 Xcel Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xcel Brands has no effect on the direction of Levi Strauss i.e., Levi Strauss and Xcel Brands go up and down completely randomly.
Pair Corralation between Levi Strauss and Xcel Brands
Given the investment horizon of 90 days Levi Strauss is expected to generate 2.54 times less return on investment than Xcel Brands. But when comparing it to its historical volatility, Levi Strauss Co is 2.34 times less risky than Xcel Brands. It trades about 0.02 of its potential returns per unit of risk. Xcel Brands is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 78.00 in Xcel Brands on August 30, 2024 and sell it today you would lose (9.00) from holding Xcel Brands or give up 11.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Levi Strauss Co vs. Xcel Brands
Performance |
| Timeline |
| Levi Strauss |
| Xcel Brands |
Levi Strauss and Xcel Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levi Strauss and Xcel Brands
The main advantage of trading using opposite Levi Strauss and Xcel Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levi Strauss position performs unexpectedly, Xcel Brands 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 Xcel Brands will offset losses from the drop in Xcel Brands' long position.| Levi Strauss vs. LYFT Inc | Levi Strauss vs. Tapestry | Levi Strauss vs. Capri Holdings | Levi Strauss vs. YETI Holdings |
| Xcel Brands vs. H M Hennes | Xcel Brands vs. Under Armour C | Xcel Brands vs. H M Hennes | Xcel Brands vs. Oxford Industries |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |