Correlation Between Hooker Furniture and Escalade Incorporated

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

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

Diversification Opportunities for Hooker Furniture and Escalade Incorporated

-0.33

Correlation Coefficient

Hooker Furniture  Escalade Incorporated

Very good diversification

The 3 months correlation between Hooker and Escalade is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hooker Furniture and Escalade Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escalade Incorporated and Hooker Furniture 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 Hooker Furniture 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 Hooker Furniture i.e., Hooker Furniture and Escalade Incorporated go up and down completely randomly.

Pair Corralation between Hooker Furniture and Escalade Incorporated

Given the investment horizon of 90 days Hooker Furniture is expected to generate 1.48 times more return on investment than Escalade Incorporated. However, Hooker Furniture is 1.48 times more volatile than Escalade Incorporated. It trades about 0.06 of its potential returns per unit of risk. Escalade Incorporated is currently generating about -0.09 per unit of risk. If you would invest  840.00  in Hooker Furniture on May 7, 2025 and sell it today you would earn a total of  95.00  from holding Hooker Furniture or generate 11.31% return on investment over 90 days.

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

Hooker Furniture  vs.  Escalade Incorporated

Hooker Furniture

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hooker Furniture are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Hooker Furniture unveiled solid returns over the last few months and may actually be approaching a breakup point.

Escalade Incorporated

Risk-Adjusted Performance

Very Weak

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 Hooker Furniture and Escalade Incorporated

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

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..