Correlation Between Levi Strauss and Wearable Devices

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

Diversification Opportunities for Levi Strauss and Wearable Devices

-0.5

Correlation Coefficient

Levi Strauss  Wearable Devices

Very good diversification

The 3 months correlation between Levi and Wearable is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Levi Strauss Co and Wearable Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wearable Devices 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 Wearable Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wearable Devices has no effect on the direction of Levi Strauss i.e., Levi Strauss and Wearable Devices go up and down completely randomly.

Pair Corralation between Levi Strauss and Wearable Devices

Given the investment horizon of 90 days Levi Strauss Co is expected to generate 0.2 times more return on investment than Wearable Devices. However, Levi Strauss Co is 5.04 times less risky than Wearable Devices. It trades about 0.15 of its potential returns per unit of risk. Wearable Devices is currently generating about 0.0 per unit of risk. If you would invest  1,644  in Levi Strauss Co on May 7, 2025 and sell it today you would earn a total of  350.00  from holding Levi Strauss Co or generate 21.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	63.93%
Values	Daily Returns

Levi Strauss Co  vs.  Wearable Devices

Levi Strauss

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Levi Strauss Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Levi Strauss demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Wearable Devices

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wearable Devices has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Wearable Devices is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Levi Strauss and Wearable Devices

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

The idea behind Levi Strauss Co and Wearable Devices 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 Stocks Directory module to find actively traded stocks across global markets.