Correlation Between Basic-Fit and Escalade Incorporated
Can any of the company-specific risk be diversified away by investing in both Basic-Fit and Escalade Incorporated 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 Basic-Fit and Escalade Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Fit NV and Escalade Incorporated, you can compare the effects of market volatilities on Basic-Fit and Escalade Incorporated 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 Basic-Fit with a short position of Escalade Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic-Fit and Escalade Incorporated.
Diversification Opportunities for Basic-Fit and Escalade Incorporated
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Basic-Fit and Escalade is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Basic Fit NV and Escalade Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escalade Incorporated and Basic-Fit 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 Basic Fit NV are associated (or correlated) with Escalade Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Escalade Incorporated has no effect on the direction of Basic-Fit i.e., Basic-Fit and Escalade Incorporated go up and down completely randomly.
Pair Corralation between Basic-Fit and Escalade Incorporated
Assuming the 90 days horizon Basic Fit NV is expected to under-perform the Escalade Incorporated. But the pink sheet apears to be less risky and, when comparing its historical volatility, Basic Fit NV is 1.11 times less risky than Escalade Incorporated. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Escalade Incorporated is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,392 in Escalade Incorporated on August 28, 2024 and sell it today you would earn a total of 164.00 from holding Escalade Incorporated or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basic Fit NV vs. Escalade Incorporated
Performance |
| Timeline |
| Basic Fit NV |
| Escalade Incorporated |
Basic-Fit and Escalade Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic-Fit and Escalade Incorporated
The main advantage of trading using opposite Basic-Fit and Escalade Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic-Fit position performs unexpectedly, Escalade Incorporated 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 Escalade Incorporated will offset losses from the drop in Escalade Incorporated's long position.| Basic-Fit vs. HUMANA INC | Basic-Fit vs. Aquagold International | Basic-Fit vs. Barloworld Ltd ADR | Basic-Fit vs. Morningstar Unconstrained Allocation |
| Escalade Incorporated vs. Johnson Outdoors | Escalade Incorporated vs. First Business Financial | Escalade Incorporated vs. Flexsteel Industries | Escalade Incorporated vs. Superior Uniform Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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