Correlation Between National CineMedia and Dave Busters
Can any of the company-specific risk be diversified away by investing in both National CineMedia 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 National CineMedia and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National CineMedia and Dave Busters Entertainment, you can compare the effects of market volatilities on National CineMedia 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 National CineMedia with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of National CineMedia and Dave Busters.
Diversification Opportunities for National CineMedia and Dave Busters
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Dave is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding National CineMedia 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 National CineMedia 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 National CineMedia 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 National CineMedia i.e., National CineMedia and Dave Busters go up and down completely randomly.
Pair Corralation between National CineMedia and Dave Busters
Given the investment horizon of 90 days National CineMedia is expected to generate 0.85 times more return on investment than Dave Busters. However, National CineMedia is 1.18 times less risky than Dave Busters. It trades about -0.02 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.09 per unit of risk. If you would invest 706.00 in National CineMedia on August 25, 2024 and sell it today you would lose (18.00) from holding National CineMedia or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National CineMedia vs. Dave Busters Entertainment
Performance |
| Timeline |
| National CineMedia |
| Dave Busters Enterta |
National CineMedia and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National CineMedia and Dave Busters
The main advantage of trading using opposite National CineMedia and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National CineMedia 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.| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Impact Fusion International | National CineMedia vs. ZW Data Action |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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