Correlation Between Escalade Incorporated and Life Time
Can any of the company-specific risk be diversified away by investing in both Escalade Incorporated and Life Time 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 Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalade Incorporated and Life Time Group, you can compare the effects of market volatilities on Escalade Incorporated and Life Time 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 Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalade Incorporated and Life Time.
Diversification Opportunities for Escalade Incorporated and Life Time
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Escalade and Life is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time Group 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 Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and Life Time go up and down completely randomly.
Pair Corralation between Escalade Incorporated and Life Time
Given the investment horizon of 90 days Escalade Incorporated is expected to generate 1.69 times more return on investment than Life Time. However, Escalade Incorporated is 1.69 times more volatile than Life Time Group. It trades about 0.19 of its potential returns per unit of risk. Life Time Group is currently generating about 0.18 per unit of risk. If you would invest 1,392 in Escalade Incorporated on August 27, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Escalade Incorporated vs. Life Time Group
Performance |
| Timeline |
| Escalade Incorporated |
| Life Time Group |
Escalade Incorporated and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalade Incorporated and Life Time
The main advantage of trading using opposite Escalade Incorporated and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalade Incorporated position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time'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 |
| Life Time vs. Bowlero Corp | Life Time vs. Planet Fitness | Life Time vs. JAKKS Pacific | Life Time vs. Xponential Fitness |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |