Correlation Between Levi Strauss and Scientific Games
Can any of the company-specific risk be diversified away by investing in both Levi Strauss and Scientific Games 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 Scientific Games 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 Scientific Games, you can compare the effects of market volatilities on Levi Strauss and Scientific Games 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 Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and Scientific Games.
Diversification Opportunities for Levi Strauss and Scientific Games
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Levi and Scientific is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games 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 Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of Levi Strauss i.e., Levi Strauss and Scientific Games go up and down completely randomly.
Pair Corralation between Levi Strauss and Scientific Games
Assuming the 90 days trading horizon Levi Strauss Co is expected to generate 1.18 times more return on investment than Scientific Games. However, Levi Strauss is 1.18 times more volatile than Scientific Games. It trades about 0.05 of its potential returns per unit of risk. Scientific Games is currently generating about 0.04 per unit of risk. If you would invest 1,349 in Levi Strauss Co on September 4, 2024 and sell it today you would earn a total of 374.00 from holding Levi Strauss Co or generate 27.72% 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. Scientific Games
Performance |
| Timeline |
| Levi Strauss |
| Scientific Games |
Levi Strauss and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Levi Strauss and Scientific Games
The main advantage of trading using opposite Levi Strauss and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levi Strauss position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.| Levi Strauss vs. Scientific Games | Levi Strauss vs. China Communications Services | Levi Strauss vs. HOCHSCHILD MINING | Levi Strauss vs. Boyd Gaming |
| Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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