Correlation Between Dave Busters and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Dave Busters and AerCap Holdings 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 Dave Busters and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dave Busters Entertainment and AerCap Holdings NV, you can compare the effects of market volatilities on Dave Busters and AerCap Holdings 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 Dave Busters with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and AerCap Holdings.
Diversification Opportunities for Dave Busters and AerCap Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dave and AerCap is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and Dave Busters 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 Dave Busters Entertainment are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Dave Busters i.e., Dave Busters and AerCap Holdings go up and down completely randomly.
Pair Corralation between Dave Busters and AerCap Holdings
Given the investment horizon of 90 days Dave Busters is expected to generate 4.69 times less return on investment than AerCap Holdings. In addition to that, Dave Busters is 1.88 times more volatile than AerCap Holdings NV. It trades about 0.01 of its total potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.07 per unit of volatility. If you would invest 5,976 in AerCap Holdings NV on August 26, 2024 and sell it today you would earn a total of 3,827 from holding AerCap Holdings NV or generate 64.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. AerCap Holdings NV
Performance |
| Timeline |
| Dave Busters Enterta |
| AerCap Holdings NV |
Dave Busters and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and AerCap Holdings
The main advantage of trading using opposite Dave Busters and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.| Dave Busters vs. Imax Corp | Dave Busters vs. Marcus | Dave Busters vs. AMC Networks | Dave Busters vs. Cinemark Holdings |
| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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