Correlation Between Scientific Games and Levi Strauss
Can any of the company-specific risk be diversified away by investing in both Scientific Games 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 Scientific Games and Levi Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scientific Games and Levi Strauss Co, you can compare the effects of market volatilities on Scientific Games 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 Scientific Games with a short position of Levi Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scientific Games and Levi Strauss.
Diversification Opportunities for Scientific Games and Levi Strauss
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scientific and Levi is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games and Levi Strauss Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levi Strauss and Scientific Games 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 Scientific Games 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 Scientific Games i.e., Scientific Games and Levi Strauss go up and down completely randomly.
Pair Corralation between Scientific Games and Levi Strauss
Assuming the 90 days horizon Scientific Games is expected to generate 1.85 times less return on investment than Levi Strauss. In addition to that, Scientific Games is 1.44 times more volatile than Levi Strauss Co. It trades about 0.08 of its total potential returns per unit of risk. Levi Strauss Co is currently generating about 0.2 per unit of volatility. If you would invest 1,573 in Levi Strauss Co on September 5, 2024 and sell it today you would earn a total of 150.00 from holding Levi Strauss Co or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Scientific Games vs. Levi Strauss Co
Performance |
| Timeline |
| Scientific Games |
| Levi Strauss |
Scientific Games and Levi Strauss Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scientific Games and Levi Strauss
The main advantage of trading using opposite Scientific Games and Levi Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games 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.| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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