Correlation Between Dave Busters and Natural Health
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Natural Health 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 Natural Health 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 Natural Health Trends, you can compare the effects of market volatilities on Dave Busters and Natural Health 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 Natural Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Natural Health.
Diversification Opportunities for Dave Busters and Natural Health
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dave and Natural is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Natural Health Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trends 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trends has no effect on the direction of Dave Busters i.e., Dave Busters and Natural Health go up and down completely randomly.
Pair Corralation between Dave Busters and Natural Health
Assuming the 90 days horizon Dave Busters Entertainment is expected to generate 1.48 times more return on investment than Natural Health. However, Dave Busters is 1.48 times more volatile than Natural Health Trends. It trades about -0.04 of its potential returns per unit of risk. Natural Health Trends is currently generating about -0.1 per unit of risk. If you would invest 3,500 in Dave Busters Entertainment on September 25, 2024 and sell it today you would lose (880.00) from holding Dave Busters Entertainment or give up 25.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. Natural Health Trends
Performance |
| Timeline |
| Dave Busters Enterta |
| Natural Health Trends |
Dave Busters and Natural Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Natural Health
The main advantage of trading using opposite Dave Busters and Natural Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Natural Health 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 Natural Health will offset losses from the drop in Natural Health's long position.| Dave Busters vs. McDonalds | Dave Busters vs. Starbucks | Dave Busters vs. Starbucks | Dave Busters vs. Yum Brands |
| Natural Health vs. PARKEN Sport Entertainment | Natural Health vs. TOWNSQUARE MEDIA INC | Natural Health vs. Dave Busters Entertainment | Natural Health vs. PLAYTIKA HOLDING DL 01 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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