Correlation Between Escalade Incorporated and Six Flags

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

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

Diversification Opportunities for Escalade Incorporated and Six Flags

0.69

Correlation Coefficient

Escalade Incorporated  Six Flags

Poor diversification

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

Pair Corralation between Escalade Incorporated and Six Flags

Given the investment horizon of 90 days Escalade Incorporated is expected to under-perform the Six Flags. In addition to that, Escalade Incorporated is 1.1 times more volatile than Six Flags Entertainment. It trades about -0.09 of its total potential returns per unit of risk. Six Flags Entertainment is currently generating about -0.08 per unit of volatility. If you would invest  3,611  in Six Flags Entertainment on May 7, 2025 and sell it today you would lose (541.00) from holding Six Flags Entertainment or give up 14.98% of portfolio value over 90 days.

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

Escalade Incorporated  vs.  Six Flags Entertainment

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.

Six Flags Entertainment

Risk-Adjusted Performance

Weakest

Over the last 90 days Six Flags Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Escalade Incorporated and Six Flags

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

The idea behind Escalade Incorporated and Six Flags Entertainment 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.