Correlation Between GBS Software and Dave Busters
Can any of the company-specific risk be diversified away by investing in both GBS Software 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 GBS Software and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GBS Software AG and Dave Busters Entertainment, you can compare the effects of market volatilities on GBS Software 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 GBS Software with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBS Software and Dave Busters.
Diversification Opportunities for GBS Software and Dave Busters
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GBS and Dave is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding GBS Software AG 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 GBS Software 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 GBS Software AG 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 GBS Software i.e., GBS Software and Dave Busters go up and down completely randomly.
Pair Corralation between GBS Software and Dave Busters
Assuming the 90 days trading horizon GBS Software AG is expected to generate 0.69 times more return on investment than Dave Busters. However, GBS Software AG is 1.45 times less risky than Dave Busters. It trades about 0.4 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.13 per unit of risk. If you would invest 262.00 in GBS Software AG on October 26, 2024 and sell it today you would earn a total of 50.00 from holding GBS Software AG or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GBS Software AG vs. Dave Busters Entertainment
Performance |
| Timeline |
| GBS Software AG |
| Dave Busters Enterta |
GBS Software and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBS Software and Dave Busters
The main advantage of trading using opposite GBS Software and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBS Software 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.| GBS Software vs. INSURANCE AUST GRP | GBS Software vs. IMPERIAL TOBACCO | GBS Software vs. Insurance Australia Group | GBS Software vs. Goosehead Insurance |
| Dave Busters vs. GBS Software AG | Dave Busters vs. ANTA SPORTS PRODUCT | Dave Busters vs. Guidewire Software | Dave Busters vs. ASURE SOFTWARE |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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