Correlation Between Dine Brands and Dave Busters
Can any of the company-specific risk be diversified away by investing in both Dine Brands 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 Dine Brands and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dine Brands Global and Dave Busters Entertainment, you can compare the effects of market volatilities on Dine Brands 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 Dine Brands with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dine Brands and Dave Busters.
Diversification Opportunities for Dine Brands and Dave Busters
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dine and Dave is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dine Brands Global 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 Dine Brands 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 Dine Brands Global 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 Dine Brands i.e., Dine Brands and Dave Busters go up and down completely randomly.
Pair Corralation between Dine Brands and Dave Busters
Considering the 90-day investment horizon Dine Brands is expected to generate 1.99 times less return on investment than Dave Busters. But when comparing it to its historical volatility, Dine Brands Global is 1.07 times less risky than Dave Busters. It trades about 0.06 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,354 in Dave Busters Entertainment on September 3, 2024 and sell it today you would earn a total of 578.00 from holding Dave Busters Entertainment or generate 17.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dine Brands Global vs. Dave Busters Entertainment
Performance |
| Timeline |
| Dine Brands Global |
| Dave Busters Enterta |
Dine Brands and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dine Brands and Dave Busters
The main advantage of trading using opposite Dine Brands and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dine Brands 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.| Dine Brands vs. Bloomin Brands | Dine Brands vs. BJs Restaurants | Dine Brands vs. The Cheesecake Factory | Dine Brands vs. Brinker International |
| Dave Busters vs. Marcus | Dave Busters vs. News Corp B | Dave Busters vs. Warner Music Group | Dave Busters vs. Manchester United |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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