Correlation Between Levi Strauss and Ping An
Can any of the company-specific risk be diversified away by investing in both Levi Strauss and Ping An 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 Ping An 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 Ping An Insurance, you can compare the effects of market volatilities on Levi Strauss and Ping An 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 Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and Ping An.
Diversification Opportunities for Levi Strauss and Ping An
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Levi and Ping is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of Levi Strauss i.e., Levi Strauss and Ping An go up and down completely randomly.
Pair Corralation between Levi Strauss and Ping An
Assuming the 90 days trading horizon Levi Strauss Co is expected to generate 0.61 times more return on investment than Ping An. However, Levi Strauss Co is 1.64 times less risky than Ping An. It trades about 0.05 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.06 per unit of risk. If you would invest 1,573 in Levi Strauss Co on September 3, 2024 and sell it today you would earn a total of 23.00 from holding Levi Strauss Co or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Levi Strauss Co vs. Ping An Insurance
Performance |
| Timeline |
| Levi Strauss |
| Ping An Insurance |
Levi Strauss and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levi Strauss and Ping An
The main advantage of trading using opposite Levi Strauss and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levi Strauss position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.| Levi Strauss vs. HM HENMAUUNSPADR 15 | Levi Strauss vs. H M Hennes | Levi Strauss vs. H M Hennes | Levi Strauss vs. VF Corporation |
| Ping An vs. LION ONE METALS | Ping An vs. IDP EDUCATION LTD | Ping An vs. DEVRY EDUCATION GRP | Ping An vs. Perseus Mining Limited |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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