Correlation Between ConnectOne Bancorp and Escalade Incorporated

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

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

Diversification Opportunities for ConnectOne Bancorp and Escalade Incorporated

-0.08

Correlation Coefficient

ConnectOne Bancorp  Escalade Incorporated

Good diversification

The 3 months correlation between ConnectOne and Escalade is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding ConnectOne Bancorp and Escalade Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escalade Incorporated and ConnectOne Bancorp 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 ConnectOne Bancorp 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 ConnectOne Bancorp i.e., ConnectOne Bancorp and Escalade Incorporated go up and down completely randomly.

Pair Corralation between ConnectOne Bancorp and Escalade Incorporated

Given the investment horizon of 90 days ConnectOne Bancorp is expected to generate 0.58 times more return on investment than Escalade Incorporated. However, ConnectOne Bancorp is 1.71 times less risky than Escalade Incorporated. It trades about -0.02 of its potential returns per unit of risk. Escalade Incorporated is currently generating about -0.09 per unit of risk. If you would invest  2,328  in ConnectOne Bancorp on May 7, 2025 and sell it today you would lose (60.00) from holding ConnectOne Bancorp or give up 2.58% of portfolio value over 90 days.

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

ConnectOne Bancorp  vs.  Escalade Incorporated

ConnectOne Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days ConnectOne Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ConnectOne Bancorp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Escalade Incorporated

Risk-Adjusted Performance

Weakest

Over the last 90 days Escalade Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with ConnectOne Bancorp and Escalade Incorporated

The main advantage of trading using opposite ConnectOne Bancorp and Escalade Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConnectOne Bancorp 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.

The idea behind ConnectOne Bancorp and Escalade Incorporated 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..