Correlation Between Escalade Incorporated and Brunswick
Can any of the company-specific risk be diversified away by investing in both Escalade Incorporated and Brunswick 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 Escalade Incorporated and Brunswick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalade Incorporated and Brunswick, you can compare the effects of market volatilities on Escalade Incorporated and Brunswick 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 Escalade Incorporated with a short position of Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalade Incorporated and Brunswick.
Diversification Opportunities for Escalade Incorporated and Brunswick
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Escalade and Brunswick is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and Escalade Incorporated 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 Escalade Incorporated are associated (or correlated) with Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and Brunswick go up and down completely randomly.
Pair Corralation between Escalade Incorporated and Brunswick
Given the investment horizon of 90 days Escalade Incorporated is expected to generate 1.19 times more return on investment than Brunswick. However, Escalade Incorporated is 1.19 times more volatile than Brunswick. It trades about 0.13 of its potential returns per unit of risk. Brunswick is currently generating about 0.04 per unit of risk. If you would invest 1,440 in Escalade Incorporated on October 21, 2024 and sell it today you would earn a total of 60.00 from holding Escalade Incorporated or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Escalade Incorporated vs. Brunswick
Performance |
| Timeline |
| Escalade Incorporated |
| Brunswick |
Escalade Incorporated and Brunswick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalade Incorporated and Brunswick
The main advantage of trading using opposite Escalade Incorporated and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalade Incorporated position performs unexpectedly, Brunswick 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 Brunswick will offset losses from the drop in Brunswick's long position.| Escalade Incorporated vs. Johnson Outdoors | Escalade Incorporated vs. First Business Financial | Escalade Incorporated vs. Flexsteel Industries | Escalade Incorporated vs. Superior Uniform Group |
| Brunswick vs. MCBC Holdings | Brunswick vs. Marine Products | Brunswick vs. Winnebago Industries | Brunswick vs. LCI Industries |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |