Correlation Between Samsonite International and Steven Madden

Can any of the company-specific risk be diversified away by investing in both Samsonite International and Steven Madden 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 Samsonite International and Steven Madden into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samsonite International SA and Steven Madden, you can compare the effects of market volatilities on Samsonite International and Steven Madden 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 Samsonite International with a short position of Steven Madden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsonite International and Steven Madden.

Diversification Opportunities for Samsonite International and Steven Madden

0.53

Correlation Coefficient

Samsonite International  Steven Madden

Very weak diversification

The 3 months correlation between Samsonite and Steven is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Samsonite International SA and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden and Samsonite International 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 Samsonite International SA are associated (or correlated) with Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Samsonite International i.e., Samsonite International and Steven Madden go up and down completely randomly.

Pair Corralation between Samsonite International and Steven Madden

Assuming the 90 days horizon Samsonite International SA is expected to generate 1.6 times more return on investment than Steven Madden. However, Samsonite International is 1.6 times more volatile than Steven Madden. It trades about 0.01 of its potential returns per unit of risk. Steven Madden is currently generating about -0.02 per unit of risk. If you would invest  1,230  in Samsonite International SA on August 28, 2024 and sell it today you would lose (1.00) from holding Samsonite International SA or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Samsonite International SA  vs.  Steven Madden

Samsonite International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsonite International SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Samsonite International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Steven Madden

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Steven Madden are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Steven Madden is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Samsonite International and Steven Madden

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

The idea behind Samsonite International SA and Steven Madden 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.