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

0.82

Correlation Coefficient

Samsonite International  Steven Madden

Very poor diversification

The 3 months correlation between Samsonite and Steven is 0.82. 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 generate 0.7 times more return on investment than Steven Madden. However, Samsonite International SA is 1.43 times less risky than Steven Madden. It trades about -0.12 of its potential returns per unit of risk. Steven Madden is currently generating about -0.27 per unit of risk. 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	Strong
Accuracy	100.0%
Values	Daily Returns

Samsonite International SA  vs.  Steven Madden

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.

Steven Madden

Risk-Adjusted Performance

Very Weak

Over the last 90 days Steven Madden 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 basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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.

The idea behind Samsonite International SA and Steven Madden 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.