Correlation Between HE Equipment and Dave Busters
Can any of the company-specific risk be diversified away by investing in both HE Equipment 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 HE Equipment and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and Dave Busters Entertainment, you can compare the effects of market volatilities on HE Equipment 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 HE Equipment with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Dave Busters.
Diversification Opportunities for HE Equipment and Dave Busters
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HEES and Dave is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment 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 HE Equipment 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 HE Equipment 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 HE Equipment i.e., HE Equipment and Dave Busters go up and down completely randomly.
Pair Corralation between HE Equipment and Dave Busters
Given the investment horizon of 90 days HE Equipment Services is expected to generate 0.86 times more return on investment than Dave Busters. However, HE Equipment Services is 1.16 times less risky than Dave Busters. It trades about 0.17 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 5,302 in HE Equipment Services on August 30, 2024 and sell it today you would earn a total of 631.00 from holding HE Equipment Services or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. Dave Busters Entertainment
Performance |
| Timeline |
| HE Equipment Services |
| Dave Busters Enterta |
HE Equipment and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Dave Busters
The main advantage of trading using opposite HE Equipment and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment 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.| HE Equipment vs. GATX Corporation | HE Equipment vs. McGrath RentCorp | HE Equipment vs. Alta Equipment Group | HE Equipment vs. Ryder System |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |