Correlation Between Samsonite International and Nike

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

Diversification Opportunities for Samsonite International and Nike

0.14

Correlation Coefficient

Samsonite International  Nike

Average diversification

The 3 months correlation between Samsonite and Nike is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Samsonite International SA and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of Samsonite International i.e., Samsonite International and Nike go up and down completely randomly.

Pair Corralation between Samsonite International and Nike

Assuming the 90 days horizon Samsonite International SA is expected to generate 1.59 times more return on investment than Nike. However, Samsonite International is 1.59 times more volatile than Nike Inc. It trades about -0.02 of its potential returns per unit of risk. Nike Inc is currently generating about -0.04 per unit of risk. If you would invest  313.00  in Samsonite International SA on September 3, 2024 and sell it today you would lose (57.00) from holding Samsonite International SA or give up 18.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.8%
Values	Daily Returns

Samsonite International SA  vs.  Nike Inc

Samsonite International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsonite International SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Samsonite International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nike Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nike Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Nike is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Samsonite International and Nike

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

The idea behind Samsonite International SA and Nike 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.