Correlation Between Winnebago Industries and Escalade Incorporated
Can any of the company-specific risk be diversified away by investing in both Winnebago Industries 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 Winnebago Industries and Escalade Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winnebago Industries and Escalade Incorporated, you can compare the effects of market volatilities on Winnebago Industries 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 Winnebago Industries with a short position of Escalade Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winnebago Industries and Escalade Incorporated.
Diversification Opportunities for Winnebago Industries and Escalade Incorporated
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Winnebago and Escalade is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Winnebago Industries and Escalade Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escalade Incorporated and Winnebago Industries 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 Winnebago Industries 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 Winnebago Industries i.e., Winnebago Industries and Escalade Incorporated go up and down completely randomly.
Pair Corralation between Winnebago Industries and Escalade Incorporated
Considering the 90-day investment horizon Winnebago Industries is expected to generate 1.18 times less return on investment than Escalade Incorporated. But when comparing it to its historical volatility, Winnebago Industries is 1.08 times less risky than Escalade Incorporated. It trades about 0.17 of its potential returns per unit of risk. Escalade Incorporated is currently generating about 0.18 of returns per unit of risk over similar time horizon. 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 |
Winnebago Industries vs. Escalade Incorporated
Performance |
| Timeline |
| Winnebago Industries |
| Escalade Incorporated |
Winnebago Industries and Escalade Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winnebago Industries and Escalade Incorporated
The main advantage of trading using opposite Winnebago Industries and Escalade Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winnebago Industries 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.| Winnebago Industries vs. LCI Industries | Winnebago Industries vs. Brunswick | Winnebago Industries vs. Polaris Industries | Winnebago Industries vs. Marine Products |
| Escalade Incorporated vs. MCBC Holdings | Escalade Incorporated vs. Winnebago Industries | Escalade Incorporated vs. LCI Industries | Escalade Incorporated vs. Thor Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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