Correlation Between Escalade Incorporated and Vision Marine

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

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

Diversification Opportunities for Escalade Incorporated and Vision Marine

-0.69

Correlation Coefficient

Escalade Incorporated  Vision Marine

Excellent diversification

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

Pair Corralation between Escalade Incorporated and Vision Marine

Given the investment horizon of 90 days Escalade Incorporated is expected to generate 0.34 times more return on investment than Vision Marine. However, Escalade Incorporated is 2.93 times less risky than Vision Marine. It trades about 0.03 of its potential returns per unit of risk. Vision Marine Technologies is currently generating about -0.18 per unit of risk. If you would invest  1,392  in Escalade Incorporated on September 29, 2024 and sell it today you would earn a total of  44.00  from holding Escalade Incorporated or generate 3.16% 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.  Vision Marine Technologies

Escalade Incorporated

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Escalade Incorporated are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Escalade Incorporated is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Vision Marine Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vision Marine Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Escalade Incorporated and Vision Marine

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

The idea behind Escalade Incorporated and Vision Marine Technologies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.