Correlation Between Escalade Incorporated and Allbirds
Can any of the company-specific risk be diversified away by investing in both Escalade Incorporated and Allbirds 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 Allbirds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalade Incorporated and Allbirds, you can compare the effects of market volatilities on Escalade Incorporated and Allbirds 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 Allbirds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalade Incorporated and Allbirds.
Diversification Opportunities for Escalade Incorporated and Allbirds
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Escalade and Allbirds is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Allbirds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allbirds 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 Allbirds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allbirds has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and Allbirds go up and down completely randomly.
Pair Corralation between Escalade Incorporated and Allbirds
Given the investment horizon of 90 days Escalade Incorporated is expected to generate 0.47 times more return on investment than Allbirds. However, Escalade Incorporated is 2.12 times less risky than Allbirds. It trades about 0.03 of its potential returns per unit of risk. Allbirds is currently generating about -0.04 per unit of risk. If you would invest 1,179 in Escalade Incorporated on August 27, 2024 and sell it today you would earn a total of 344.00 from holding Escalade Incorporated or generate 29.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Escalade Incorporated vs. Allbirds
Performance |
| Timeline |
| Escalade Incorporated |
| Allbirds |
Escalade Incorporated and Allbirds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalade Incorporated and Allbirds
The main advantage of trading using opposite Escalade Incorporated and Allbirds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalade Incorporated position performs unexpectedly, Allbirds 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 Allbirds will offset losses from the drop in Allbirds' long position.| Escalade Incorporated vs. Johnson Outdoors | Escalade Incorporated vs. First Business Financial | Escalade Incorporated vs. Flexsteel Industries | Escalade Incorporated vs. Superior Uniform Group |
| Allbirds vs. Stitch Fix | Allbirds vs. Genesco | Allbirds vs. Shoe Carnival | Allbirds vs. Lulus Fashion Lounge |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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