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
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsonite and Steven is 0.43. 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 under-perform the Steven Madden. In addition to that, Samsonite International is 1.65 times more volatile than Steven Madden. It trades about -0.02 of its total potential returns per unit of risk. Steven Madden is currently generating about 0.04 per unit of volatility. If you would invest 3,704 in Steven Madden on August 24, 2024 and sell it today you would earn a total of 578.00 from holding Steven Madden or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Samsonite International SA vs. Steven Madden
Performance |
| Timeline |
| Samsonite International |
| Steven Madden |
Samsonite International and Steven Madden Volatility Contrast
Predicted Return Density |
| Returns |
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.| Samsonite International vs. Puma SE | Samsonite International vs. Asics Corp ADR | Samsonite International vs. Adidas AG ADR | Samsonite International vs. Wolverine World Wide |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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