Correlation Between Skechers USA and Samsonite International

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

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

Diversification Opportunities for Skechers USA and Samsonite International

0.78

Correlation Coefficient

Skechers USA  Samsonite International

Poor diversification

The 3 months correlation between Skechers and Samsonite is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Samsonite International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsonite International and Skechers USA 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 Skechers USA 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 Skechers USA i.e., Skechers USA and Samsonite International go up and down completely randomly.

Pair Corralation between Skechers USA and Samsonite International

Considering the 90-day investment horizon Skechers USA is expected to under-perform the Samsonite International. In addition to that, Skechers USA is 1.49 times more volatile than Samsonite International SA. It trades about -0.09 of its total potential returns per unit of risk. Samsonite International SA is currently generating about -0.12 per unit of volatility. If you would invest  1,359  in Samsonite International SA on December 30, 2024 and sell it today you would lose (183.00) from holding Samsonite International SA or give up 13.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Skechers USA  vs.  Samsonite International SA

Skechers USA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Skechers USA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Samsonite International

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Skechers USA and Samsonite International

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

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.