Correlation Between Escalade Incorporated and Six Flags
Can any of the company-specific risk be diversified away by investing in both Escalade Incorporated and Six Flags 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 Six Flags into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalade Incorporated and Six Flags Entertainment, you can compare the effects of market volatilities on Escalade Incorporated and Six Flags 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 Six Flags. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalade Incorporated and Six Flags.
Diversification Opportunities for Escalade Incorporated and Six Flags
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Escalade and Six is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Six Flags Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Six Flags Entertainment 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 Six Flags. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Six Flags Entertainment has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and Six Flags go up and down completely randomly.
Pair Corralation between Escalade Incorporated and Six Flags
Given the investment horizon of 90 days Escalade Incorporated is expected to generate 1.36 times more return on investment than Six Flags. However, Escalade Incorporated is 1.36 times more volatile than Six Flags Entertainment. It trades about 0.19 of its potential returns per unit of risk. Six Flags Entertainment is currently generating about 0.18 per unit of risk. 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Escalade Incorporated vs. Six Flags Entertainment
Performance |
| Timeline |
| Escalade Incorporated |
| Six Flags Entertainment |
Escalade Incorporated and Six Flags Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalade Incorporated and Six Flags
The main advantage of trading using opposite Escalade Incorporated and Six Flags positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalade Incorporated position performs unexpectedly, Six Flags 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 Six Flags will offset losses from the drop in Six Flags' long position.| Escalade Incorporated vs. Johnson Outdoors | Escalade Incorporated vs. First Business Financial | Escalade Incorporated vs. Flexsteel Industries | Escalade Incorporated vs. Superior Uniform Group |
| Six Flags vs. Planet Fitness | Six Flags vs. Madison Square Garden | Six Flags vs. Mattel Inc | Six Flags vs. Johnson Outdoors |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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