Correlation Between Escalade Incorporated and Lanvin Group

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

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

Diversification Opportunities for Escalade Incorporated and Lanvin Group

-0.59

Correlation Coefficient

Escalade Incorporated  Lanvin Group

Excellent diversification

The 3 months correlation between Escalade and Lanvin is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Escalade Incorporated and Lanvin Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lanvin Group Holdings 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 Lanvin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lanvin Group Holdings has no effect on the direction of Escalade Incorporated i.e., Escalade Incorporated and Lanvin Group go up and down completely randomly.

Pair Corralation between Escalade Incorporated and Lanvin Group

Given the investment horizon of 90 days Escalade Incorporated is expected to generate 0.52 times more return on investment than Lanvin Group. However, Escalade Incorporated is 1.91 times less risky than Lanvin Group. It trades about 0.11 of its potential returns per unit of risk. Lanvin Group Holdings is currently generating about -0.01 per unit of risk. If you would invest  1,254  in Escalade Incorporated on September 1, 2024 and sell it today you would earn a total of  246.00  from holding Escalade Incorporated or generate 19.62% return on investment over 90 days.

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

Escalade Incorporated  vs.  Lanvin Group Holdings

Escalade Incorporated

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Escalade Incorporated are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Escalade Incorporated sustained solid returns over the last few months and may actually be approaching a breakup point.

Lanvin Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lanvin Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Lanvin Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Escalade Incorporated and Lanvin Group

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

The idea behind Escalade Incorporated and Lanvin Group Holdings 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.