Correlation Between Hasbro and Escalade Incorporated
Can any of the company-specific risk be diversified away by investing in both Hasbro and Escalade Incorporated 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 Hasbro and Escalade Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and Escalade Incorporated, you can compare the effects of market volatilities on Hasbro and Escalade Incorporated 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 Hasbro with a short position of Escalade Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and Escalade Incorporated.
Diversification Opportunities for Hasbro and Escalade Incorporated
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hasbro and Escalade is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Escalade Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escalade Incorporated and Hasbro 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 Hasbro Inc are associated (or correlated) with Escalade Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Escalade Incorporated has no effect on the direction of Hasbro i.e., Hasbro and Escalade Incorporated go up and down completely randomly.
Pair Corralation between Hasbro and Escalade Incorporated
Considering the 90-day investment horizon Hasbro Inc is expected to generate 0.59 times more return on investment than Escalade Incorporated. However, Hasbro Inc is 1.69 times less risky than Escalade Incorporated. It trades about 0.05 of its potential returns per unit of risk. Escalade Incorporated is currently generating about 0.01 per unit of risk. If you would invest 4,828 in Hasbro Inc on November 3, 2024 and sell it today you would earn a total of 956.00 from holding Hasbro Inc or generate 19.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hasbro Inc vs. Escalade Incorporated
Performance |
| Timeline |
| Hasbro Inc |
| Escalade Incorporated |
Hasbro and Escalade Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and Escalade Incorporated
The main advantage of trading using opposite Hasbro and Escalade Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro position performs unexpectedly, Escalade Incorporated 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 Escalade Incorporated will offset losses from the drop in Escalade Incorporated's long position.The idea behind Hasbro Inc and Escalade Incorporated pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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