Correlation Between Escalade Incorporated and Funko
Can any of the company-specific risk be diversified away by investing in both Escalade Incorporated and Funko 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 Funko into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalade Incorporated and Funko Inc, you can compare the effects of market volatilities on Escalade Incorporated and Funko 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 Funko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalade Incorporated and Funko.
Diversification Opportunities for Escalade Incorporated and Funko
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Escalade and Funko is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Funko Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Funko Inc 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 Funko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Funko Inc has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and Funko go up and down completely randomly.
Pair Corralation between Escalade Incorporated and Funko
Given the investment horizon of 90 days Escalade Incorporated is expected to generate 0.75 times more return on investment than Funko. However, Escalade Incorporated is 1.33 times less risky than Funko. It trades about 0.05 of its potential returns per unit of risk. Funko Inc is currently generating about 0.02 per unit of risk. If you would invest 935.00 in Escalade Incorporated on August 27, 2024 and sell it today you would earn a total of 588.00 from holding Escalade Incorporated or generate 62.89% 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. Funko Inc
Performance |
| Timeline |
| Escalade Incorporated |
| Funko Inc |
Escalade Incorporated and Funko Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalade Incorporated and Funko
The main advantage of trading using opposite Escalade Incorporated and Funko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalade Incorporated position performs unexpectedly, Funko 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 Funko will offset losses from the drop in Funko'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 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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