Correlation Between Adidas AG and Samsonite International
Can any of the company-specific risk be diversified away by investing in both Adidas AG and Samsonite 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 Adidas AG and Samsonite International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adidas AG and Samsonite International SA, you can compare the effects of market volatilities on Adidas AG and Samsonite 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 Adidas AG with a short position of Samsonite International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adidas AG and Samsonite International.
Diversification Opportunities for Adidas AG and Samsonite International
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adidas and Samsonite is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Adidas AG and Samsonite International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsonite International and Adidas AG 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 Adidas AG are associated (or correlated) with Samsonite International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsonite International has no effect on the direction of Adidas AG i.e., Adidas AG and Samsonite International go up and down completely randomly.
Pair Corralation between Adidas AG and Samsonite International
Assuming the 90 days horizon Adidas AG is expected to under-perform the Samsonite International. In addition to that, Adidas AG is 1.02 times more volatile than Samsonite International SA. It trades about -0.02 of its total potential returns per unit of risk. Samsonite International SA is currently generating about 0.01 per unit of volatility. 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adidas AG vs. Samsonite International SA
Performance |
| Timeline |
| Adidas AG |
| Samsonite International |
Adidas AG and Samsonite International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adidas AG and Samsonite International
The main advantage of trading using opposite Adidas AG and Samsonite International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adidas AG position performs unexpectedly, Samsonite 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 Samsonite International will offset losses from the drop in Samsonite International's long position.| Adidas AG vs. American Rebel Holdings | Adidas AG vs. American Rebel Holdings | Adidas AG vs. Crocs Inc | Adidas AG vs. On Holding |
| Samsonite International vs. American Rebel Holdings | Samsonite International vs. American Rebel Holdings | Samsonite International vs. Crocs Inc | Samsonite International vs. On Holding |
Check out your portfolio center.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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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