Correlation Between Capri Holdings and Levi Strauss
Can any of the company-specific risk be diversified away by investing in both Capri Holdings and Levi Strauss 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 Capri Holdings and Levi Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capri Holdings Limited and Levi Strauss Co, you can compare the effects of market volatilities on Capri Holdings and Levi Strauss 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 Capri Holdings with a short position of Levi Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capri Holdings and Levi Strauss.
Diversification Opportunities for Capri Holdings and Levi Strauss
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capri and Levi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Capri Holdings Limited and Levi Strauss Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levi Strauss and Capri Holdings 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 Capri Holdings Limited are associated (or correlated) with Levi Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Levi Strauss has no effect on the direction of Capri Holdings i.e., Capri Holdings and Levi Strauss go up and down completely randomly.
Pair Corralation between Capri Holdings and Levi Strauss
Assuming the 90 days horizon Capri Holdings Limited is expected to under-perform the Levi Strauss. In addition to that, Capri Holdings is 2.95 times more volatile than Levi Strauss Co. It trades about -0.05 of its total potential returns per unit of risk. Levi Strauss Co is currently generating about -0.04 per unit of volatility. If you would invest 1,710 in Levi Strauss Co on August 28, 2024 and sell it today you would lose (140.00) from holding Levi Strauss Co or give up 8.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capri Holdings Limited vs. Levi Strauss Co
Performance |
| Timeline |
| Capri Holdings |
| Levi Strauss |
Capri Holdings and Levi Strauss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capri Holdings and Levi Strauss
The main advantage of trading using opposite Capri Holdings and Levi Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings position performs unexpectedly, Levi Strauss 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 Levi Strauss will offset losses from the drop in Levi Strauss' long position.| Capri Holdings vs. Australian Agricultural | Capri Holdings vs. China Resources Beer | Capri Holdings vs. Suntory Beverage Food | Capri Holdings vs. Dairy Farm International |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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