Correlation Between Dave Busters and China Railway
Can any of the company-specific risk be diversified away by investing in both Dave Busters and China Railway 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 China Railway 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 China Railway Signal, you can compare the effects of market volatilities on Dave Busters and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and China Railway.
Diversification Opportunities for Dave Busters and China Railway
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dave and China is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and China Railway Signal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Signal 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Signal has no effect on the direction of Dave Busters i.e., Dave Busters and China Railway go up and down completely randomly.
Pair Corralation between Dave Busters and China Railway
Assuming the 90 days horizon Dave Busters is expected to generate 25.64 times less return on investment than China Railway. But when comparing it to its historical volatility, Dave Busters Entertainment is 2.78 times less risky than China Railway. It trades about 0.01 of its potential returns per unit of risk. China Railway Signal is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 13.00 in China Railway Signal on September 12, 2024 and sell it today you would earn a total of 25.00 from holding China Railway Signal or generate 192.31% 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. China Railway Signal
Performance |
| Timeline |
| Dave Busters Enterta |
| China Railway Signal |
Dave Busters and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and China Railway
The main advantage of trading using opposite Dave Busters and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Dave Busters vs. REVO INSURANCE SPA | Dave Busters vs. JSC Halyk bank | Dave Busters vs. The Hanover Insurance | Dave Busters vs. Jupiter Fund Management |
| China Railway vs. Dave Busters Entertainment | China Railway vs. PLAYSTUDIOS A DL 0001 | China Railway vs. CNVISION MEDIA | China Railway vs. PT Global Mediacom |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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