Correlation Between AerCap Holdings and Dave Busters
Can any of the company-specific risk be diversified away by investing in both AerCap Holdings and Dave Busters 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 AerCap Holdings and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerCap Holdings NV and Dave Busters Entertainment, you can compare the effects of market volatilities on AerCap Holdings and Dave Busters 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 AerCap Holdings with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and Dave Busters.
Diversification Opportunities for AerCap Holdings and Dave Busters
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AerCap and Dave is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and Dave Busters Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Busters Enterta and AerCap Holdings 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 AerCap Holdings NV are associated (or correlated) with Dave Busters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Busters Enterta has no effect on the direction of AerCap Holdings i.e., AerCap Holdings and Dave Busters go up and down completely randomly.
Pair Corralation between AerCap Holdings and Dave Busters
Considering the 90-day investment horizon AerCap Holdings NV is expected to generate 0.36 times more return on investment than Dave Busters. However, AerCap Holdings NV is 2.77 times less risky than Dave Busters. It trades about 0.13 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.03 per unit of risk. If you would invest 9,547 in AerCap Holdings NV on August 30, 2024 and sell it today you would earn a total of 362.00 from holding AerCap Holdings NV or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerCap Holdings NV vs. Dave Busters Entertainment
Performance |
| Timeline |
| AerCap Holdings NV |
| Dave Busters Enterta |
AerCap Holdings and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerCap Holdings and Dave Busters
The main advantage of trading using opposite AerCap Holdings and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerCap Holdings position performs unexpectedly, Dave Busters 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 Dave Busters will offset losses from the drop in Dave Busters' long position.| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
| Dave Busters vs. Imax Corp | Dave Busters vs. Marcus | Dave Busters vs. AMC Networks | Dave Busters vs. Cinemark Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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