Correlation Between Escalade Incorporated and MCBC Holdings
Can any of the company-specific risk be diversified away by investing in both Escalade Incorporated and MCBC Holdings 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 MCBC Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalade Incorporated and MCBC Holdings, you can compare the effects of market volatilities on Escalade Incorporated and MCBC Holdings 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 MCBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalade Incorporated and MCBC Holdings.
Diversification Opportunities for Escalade Incorporated and MCBC Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Escalade and MCBC is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and MCBC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCBC Holdings 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 MCBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCBC Holdings has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and MCBC Holdings go up and down completely randomly.
Pair Corralation between Escalade Incorporated and MCBC Holdings
Given the investment horizon of 90 days Escalade Incorporated is expected to generate 2.13 times less return on investment than MCBC Holdings. But when comparing it to its historical volatility, Escalade Incorporated is 1.82 times less risky than MCBC Holdings. It trades about 0.18 of its potential returns per unit of risk. MCBC Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,741 in MCBC Holdings on August 28, 2024 and sell it today you would earn a total of 447.00 from holding MCBC Holdings or generate 25.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Escalade Incorporated vs. MCBC Holdings
Performance |
| Timeline |
| Escalade Incorporated |
| MCBC Holdings |
Escalade Incorporated and MCBC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalade Incorporated and MCBC Holdings
The main advantage of trading using opposite Escalade Incorporated and MCBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalade Incorporated position performs unexpectedly, MCBC Holdings 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 MCBC Holdings will offset losses from the drop in MCBC Holdings' long position.| Escalade Incorporated vs. MCBC Holdings | Escalade Incorporated vs. Winnebago Industries | Escalade Incorporated vs. LCI Industries | Escalade Incorporated vs. Thor Industries |
| MCBC Holdings vs. Malibu Boats | MCBC Holdings vs. Onewater Marine | MCBC Holdings vs. Heidrick Struggles International | MCBC Holdings 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |