Correlation Between Moncler SpA and Levi Strauss

Can any of the company-specific risk be diversified away by investing in both Moncler SpA 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 Moncler SpA and Levi Strauss into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moncler SpA and Levi Strauss Co, you can compare the effects of market volatilities on Moncler SpA 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 Moncler SpA with a short position of Levi Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moncler SpA and Levi Strauss.

Diversification Opportunities for Moncler SpA and Levi Strauss

0.62

Correlation Coefficient

Moncler SpA  Levi Strauss

Poor diversification

The 3 months correlation between Moncler and Levi is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Moncler SpA and Levi Strauss Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Levi Strauss and Moncler SpA 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 Moncler SpA 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 Moncler SpA i.e., Moncler SpA and Levi Strauss go up and down completely randomly.

Pair Corralation between Moncler SpA and Levi Strauss

Assuming the 90 days horizon Moncler SpA is expected to under-perform the Levi Strauss. But the stock apears to be less risky and, when comparing its historical volatility, Moncler SpA is 1.28 times less risky than Levi Strauss. The stock trades about -0.18 of its potential returns per unit of risk. The Levi Strauss Co is currently generating about 0.21 of returns per unit of risk over similar time horizon. 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Moncler SpA  vs.  Levi Strauss Co

Moncler SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moncler SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Levi Strauss

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Levi Strauss Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Levi Strauss is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Moncler SpA and Levi Strauss

The main advantage of trading using opposite Moncler SpA and Levi Strauss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moncler SpA 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.

The idea behind Moncler SpA and Levi Strauss Co 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 Transaction History module to view history of all your transactions and understand their impact on performance.