Correlation Between Dave Busters and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both Dave Busters and GAMESTOP 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 Dave Busters and GAMESTOP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dave Busters Entertainment and GAMESTOP, you can compare the effects of market volatilities on Dave Busters and GAMESTOP 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 Dave Busters with a short position of GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and GAMESTOP.
Diversification Opportunities for Dave Busters and GAMESTOP
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dave and GAMESTOP is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP and Dave Busters 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 Dave Busters Entertainment are associated (or correlated) with GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of Dave Busters i.e., Dave Busters and GAMESTOP go up and down completely randomly.
Pair Corralation between Dave Busters and GAMESTOP
Assuming the 90 days horizon Dave Busters is expected to generate 11.91 times less return on investment than GAMESTOP. But when comparing it to its historical volatility, Dave Busters Entertainment is 1.08 times less risky than GAMESTOP. It trades about 0.03 of its potential returns per unit of risk. GAMESTOP is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,028 in GAMESTOP on September 1, 2024 and sell it today you would earn a total of 674.00 from holding GAMESTOP or generate 33.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. GAMESTOP
Performance |
| Timeline |
| Dave Busters Enterta |
| GAMESTOP |
Dave Busters and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and GAMESTOP
The main advantage of trading using opposite Dave Busters and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.| Dave Busters vs. CVS Health | Dave Busters vs. Bumrungrad Hospital Public | Dave Busters vs. Gamma Communications plc | Dave Busters vs. United Rentals |
| GAMESTOP vs. SIVERS SEMICONDUCTORS AB | GAMESTOP vs. Darden Restaurants | GAMESTOP vs. Reliance Steel Aluminum | GAMESTOP vs. Q2M Managementberatung AG |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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