Correlation Between Samsonite International and Crocs

Can any of the company-specific risk be diversified away by investing in both Samsonite International and Crocs 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 Crocs 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 Crocs Inc, you can compare the effects of market volatilities on Samsonite International and Crocs 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 Crocs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsonite International and Crocs.

Diversification Opportunities for Samsonite International and Crocs

-0.3

Correlation Coefficient

Samsonite International  Crocs

Very good diversification

The 3 months correlation between Samsonite and Crocs is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Samsonite International SA and Crocs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crocs Inc 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 Crocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crocs Inc has no effect on the direction of Samsonite International i.e., Samsonite International and Crocs go up and down completely randomly.

Pair Corralation between Samsonite International and Crocs

Assuming the 90 days horizon Samsonite International SA is expected to under-perform the Crocs. But the pink sheet apears to be less risky and, when comparing its historical volatility, Samsonite International SA is 2.12 times less risky than Crocs. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Crocs Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  10,871  in Crocs Inc on December 30, 2024 and sell it today you would lose (272.00) from holding Crocs Inc or give up 2.5% of portfolio value over 90 days.

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

Samsonite International SA  vs.  Crocs Inc

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.

Crocs Inc

Risk-Adjusted Performance

Weak

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

Pair Trading with Samsonite International and Crocs

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

The idea behind Samsonite International SA and Crocs Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.