Correlation Between Peloton Interactive and Escalade Incorporated

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

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

Diversification Opportunities for Peloton Interactive and Escalade Incorporated

0.23

Correlation Coefficient

Peloton Interactive  Escalade Incorporated

Modest diversification

The 3 months correlation between Peloton and Escalade is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Peloton Interactive and Escalade Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Escalade Incorporated and Peloton Interactive 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 Peloton Interactive 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 Peloton Interactive i.e., Peloton Interactive and Escalade Incorporated go up and down completely randomly.

Pair Corralation between Peloton Interactive and Escalade Incorporated

Given the investment horizon of 90 days Peloton Interactive is expected to generate 1.7 times more return on investment than Escalade Incorporated. However, Peloton Interactive is 1.7 times more volatile 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  698.00  in Peloton Interactive on May 7, 2025 and sell it today you would lose (2.00) from holding Peloton Interactive or give up 0.29% of portfolio value over 90 days.

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

Peloton Interactive  vs.  Escalade Incorporated

Peloton Interactive

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Peloton Interactive are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Peloton Interactive may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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 Peloton Interactive and Escalade Incorporated

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