Correlation Between Levi Strauss and Talon International

Can any of the company-specific risk be diversified away by investing in both Levi Strauss and Talon International 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 Talon International 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 Talon International, you can compare the effects of market volatilities on Levi Strauss and Talon International 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 Talon International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Levi Strauss and Talon International.

Diversification Opportunities for Levi Strauss and Talon International

0.36

Correlation Coefficient

Levi Strauss  Talon International

Weak diversification

The 3 months correlation between Levi and Talon is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Talon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talon International 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 Talon International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talon International has no effect on the direction of Levi Strauss i.e., Levi Strauss and Talon International go up and down completely randomly.

Pair Corralation between Levi Strauss and Talon International

If you would invest  1,499  in Levi Strauss Co on September 15, 2024 and sell it today you would earn a total of  231.00  from holding Levi Strauss Co or generate 15.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.4%
Values	Daily Returns

Levi Strauss Co  vs.  Talon International

Levi Strauss

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Levi Strauss Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Talon International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Talon International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Talon International is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Levi Strauss and Talon International

The main advantage of trading using opposite Levi Strauss and Talon International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Levi Strauss position performs unexpectedly, Talon International 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 Talon International will offset losses from the drop in Talon International's long position.

The idea behind Levi Strauss Co and Talon International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 CEOs Directory module to screen CEOs from public companies around the world.