Correlation Between Escalade Incorporated and Vista Outdoor
Can any of the company-specific risk be diversified away by investing in both Escalade Incorporated and Vista Outdoor 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 Vista Outdoor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Escalade Incorporated and Vista Outdoor, you can compare the effects of market volatilities on Escalade Incorporated and Vista Outdoor 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 Vista Outdoor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalade Incorporated and Vista Outdoor.
Diversification Opportunities for Escalade Incorporated and Vista Outdoor
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Escalade and Vista is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Vista Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Outdoor 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 Vista Outdoor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Outdoor has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and Vista Outdoor go up and down completely randomly.
Pair Corralation between Escalade Incorporated and Vista Outdoor
Given the investment horizon of 90 days Escalade Incorporated is expected to generate 13.98 times more return on investment than Vista Outdoor. However, Escalade Incorporated is 13.98 times more volatile than Vista Outdoor. It trades about 0.17 of its potential returns per unit of risk. Vista Outdoor is currently generating about 0.06 per unit of risk. If you would invest 1,354 in Escalade Incorporated on August 24, 2024 and sell it today you would earn a total of 161.00 from holding Escalade Incorporated or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Escalade Incorporated vs. Vista Outdoor
Performance |
| Timeline |
| Escalade Incorporated |
| Vista Outdoor |
Escalade Incorporated and Vista Outdoor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Escalade Incorporated and Vista Outdoor
The main advantage of trading using opposite Escalade Incorporated and Vista Outdoor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalade Incorporated position performs unexpectedly, Vista Outdoor 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 Vista Outdoor will offset losses from the drop in Vista Outdoor's long position.| Escalade Incorporated vs. Vista Outdoor | Escalade Incorporated vs. Six Flags Entertainment | Escalade Incorporated vs. Canlan Ice Sports | Escalade Incorporated vs. OneSpaWorld Holdings |
| Vista Outdoor vs. Clarus Corp | Vista Outdoor vs. Johnson Outdoors | Vista Outdoor vs. Escalade Incorporated | Vista Outdoor vs. JAKKS Pacific |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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