Correlation Between BJs Restaurants and Dave Busters
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants 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 BJs Restaurants and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Dave Busters Entertainment, you can compare the effects of market volatilities on BJs Restaurants 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 BJs Restaurants with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Dave Busters.
Diversification Opportunities for BJs Restaurants and Dave Busters
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BJs and Dave is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants 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 BJs Restaurants 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 BJs Restaurants 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 BJs Restaurants i.e., BJs Restaurants and Dave Busters go up and down completely randomly.
Pair Corralation between BJs Restaurants and Dave Busters
Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.87 times more return on investment than Dave Busters. However, BJs Restaurants is 1.15 times less risky than Dave Busters. It trades about 0.03 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.05 per unit of risk. If you would invest 3,461 in BJs Restaurants on August 28, 2024 and sell it today you would earn a total of 260.00 from holding BJs Restaurants or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Dave Busters Entertainment
Performance |
| Timeline |
| BJs Restaurants |
| Dave Busters Enterta |
BJs Restaurants and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Dave Busters
The main advantage of trading using opposite BJs Restaurants and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants 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.| BJs Restaurants vs. Dine Brands Global | BJs Restaurants vs. Brinker International | BJs Restaurants vs. Bloomin Brands | BJs Restaurants vs. The Cheesecake Factory |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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