Correlation Between Kontoor Brands and Dave Busters
Can any of the company-specific risk be diversified away by investing in both Kontoor 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 Kontoor 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 Kontoor Brands and Dave Busters Entertainment, you can compare the effects of market volatilities on Kontoor 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 Kontoor Brands with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Dave Busters.
Diversification Opportunities for Kontoor Brands and Dave Busters
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kontoor and Dave is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands 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 Kontoor 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 Kontoor Brands 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 Kontoor Brands i.e., Kontoor Brands and Dave Busters go up and down completely randomly.
Pair Corralation between Kontoor Brands and Dave Busters
Considering the 90-day investment horizon Kontoor Brands is expected to generate 0.39 times more return on investment than Dave Busters. However, Kontoor Brands is 2.53 times less risky than Dave Busters. It trades about 0.36 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.06 per unit of risk. If you would invest 8,541 in Kontoor Brands on November 1, 2024 and sell it today you would earn a total of 1,022 from holding Kontoor Brands or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. Dave Busters Entertainment
Performance |
| Timeline |
| Kontoor Brands |
| Dave Busters Enterta |
Kontoor Brands and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Dave Busters
The main advantage of trading using opposite Kontoor Brands and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor 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.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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