Correlation Between Air Transport and Dave Busters
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Dave Busters Entertainment, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Dave Busters.
Diversification Opportunities for Air Transport and Dave Busters
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Dave is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services 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 Air Transport 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 Air Transport Services 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 Air Transport i.e., Air Transport and Dave Busters go up and down completely randomly.
Pair Corralation between Air Transport and Dave Busters
Assuming the 90 days horizon Air Transport Services is expected to generate 0.84 times more return on investment than Dave Busters. However, Air Transport Services is 1.19 times less risky than Dave Busters. It trades about 0.11 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.09 per unit of risk. If you would invest 1,200 in Air Transport Services on November 7, 2024 and sell it today you would earn a total of 940.00 from holding Air Transport Services or generate 78.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Dave Busters Entertainment
Performance |
| Timeline |
| Air Transport Services |
| Dave Busters Enterta |
Air Transport and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Dave Busters
The main advantage of trading using opposite Air Transport and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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.| Air Transport vs. Planet Fitness | Air Transport vs. CHINA EDUCATION GROUP | Air Transport vs. Cardinal Health | Air Transport vs. Siemens Healthineers AG |
| Dave Busters vs. Gaming and Leisure | Dave Busters vs. Merit Medical Systems | Dave Busters vs. Compugroup Medical SE | Dave Busters vs. IMAGIN MEDICAL INC |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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