Correlation Between Escalade Incorporated and Dogness International

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

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

Diversification Opportunities for Escalade Incorporated and Dogness International

-0.69

Correlation Coefficient

Escalade Incorporated  Dogness International

Excellent diversification

The 3 months correlation between Escalade and Dogness is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Dogness International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dogness International 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 Dogness International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dogness International has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and Dogness International go up and down completely randomly.

Pair Corralation between Escalade Incorporated and Dogness International

Given the investment horizon of 90 days Escalade Incorporated is expected to generate 0.19 times more return on investment than Dogness International. However, Escalade Incorporated is 5.2 times less risky than Dogness International. It trades about 0.07 of its potential returns per unit of risk. Dogness International Corp is currently generating about 0.01 per unit of risk. If you would invest  1,404  in Escalade Incorporated on December 30, 2024 and sell it today you would earn a total of  126.00  from holding Escalade Incorporated or generate 8.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Escalade Incorporated  vs.  Dogness International Corp

Escalade Incorporated

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Escalade Incorporated are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Escalade Incorporated may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Dogness International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dogness International Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak technical and fundamental indicators, Dogness International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Escalade Incorporated and Dogness International

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

The idea behind Escalade Incorporated and Dogness International Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.