Correlation Between Escalade Incorporated and Amer Sports,

Can any of the company-specific risk be diversified away by investing in both Escalade Incorporated and Amer Sports, 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 Amer Sports, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Escalade Incorporated and Amer Sports,, you can compare the effects of market volatilities on Escalade Incorporated and Amer Sports, 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 Amer Sports,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Escalade Incorporated and Amer Sports,.

Diversification Opportunities for Escalade Incorporated and Amer Sports,

0.29

Correlation Coefficient

Escalade Incorporated  Amer Sports,

Modest diversification

The 3 months correlation between Escalade and Amer is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Amer Sports, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Sports, 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 Amer Sports,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Sports, has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and Amer Sports, go up and down completely randomly.

Pair Corralation between Escalade Incorporated and Amer Sports,

Given the investment horizon of 90 days Escalade Incorporated is expected to generate 0.83 times more return on investment than Amer Sports,. However, Escalade Incorporated is 1.2 times less risky than Amer Sports,. It trades about 0.09 of its potential returns per unit of risk. Amer Sports, is currently generating about 0.0 per unit of risk. If you would invest  1,404  in Escalade Incorporated on December 28, 2024 and sell it today you would earn a total of  173.00  from holding Escalade Incorporated or generate 12.32% 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.  Amer Sports,

Escalade Incorporated

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Escalade Incorporated are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Escalade Incorporated sustained solid returns over the last few months and may actually be approaching a breakup point.

Amer Sports,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amer Sports, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Amer Sports, is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Escalade Incorporated and Amer Sports,

The main advantage of trading using opposite Escalade Incorporated and Amer Sports, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Escalade Incorporated position performs unexpectedly, Amer Sports, 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 Amer Sports, will offset losses from the drop in Amer Sports,'s long position.

The idea behind Escalade Incorporated and Amer Sports, 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.