Correlation Between Ardiden and Samsonite International

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

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

Diversification Opportunities for Ardiden and Samsonite International

-0.55

Correlation Coefficient

Ardiden  Samsonite International

Excellent diversification

The 3 months correlation between Ardiden and Samsonite is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ardiden Limited and Samsonite International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsonite International and Ardiden 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 Ardiden Limited 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 Ardiden i.e., Ardiden and Samsonite International go up and down completely randomly.

Pair Corralation between Ardiden and Samsonite International

Assuming the 90 days horizon Ardiden Limited is expected to under-perform the Samsonite International. In addition to that, Ardiden is 5.79 times more volatile than Samsonite International SA. It trades about -0.17 of its total potential returns per unit of risk. Samsonite International SA is currently generating about 0.09 per unit of volatility. If you would invest  230.00  in Samsonite International SA on September 13, 2024 and sell it today you would earn a total of  26.00  from holding Samsonite International SA or generate 11.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ardiden Limited  vs.  Samsonite International SA

Ardiden Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardiden Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Samsonite International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samsonite International SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Samsonite International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ardiden and Samsonite International

The main advantage of trading using opposite Ardiden and Samsonite International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardiden 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.

The idea behind Ardiden Limited and Samsonite International SA 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.