Correlation Between Levi Strauss and PAMT P

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

Diversification Opportunities for Levi Strauss and PAMT P

0.14

Correlation Coefficient

Levi Strauss  PAMT P

Average diversification

The 3 months correlation between Levi and PAMT is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and PAMT P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAMT P 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 PAMT P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAMT P has no effect on the direction of Levi Strauss i.e., Levi Strauss and PAMT P go up and down completely randomly.

Pair Corralation between Levi Strauss and PAMT P

Given the investment horizon of 90 days Levi Strauss Co is expected to generate 0.92 times more return on investment than PAMT P. However, Levi Strauss Co is 1.09 times less risky than PAMT P. It trades about 0.08 of its potential returns per unit of risk. PAMT P is currently generating about 0.01 per unit of risk. If you would invest  1,596  in Levi Strauss Co on February 23, 2025 and sell it today you would earn a total of  178.00  from holding Levi Strauss Co or generate 11.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Levi Strauss Co  vs.  PAMT P

Levi Strauss

Risk-Adjusted Performance

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 fairly strong basic indicators, Levi Strauss is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

PAMT P

Risk-Adjusted Performance

Very Weak

Over the last 90 days PAMT P has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, PAMT P is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Levi Strauss and PAMT P

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

The idea behind Levi Strauss Co and PAMT P 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..