Correlation Between Dave Busters and AMC Networks
Can any of the company-specific risk be diversified away by investing in both Dave Busters and AMC Networks 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 AMC Networks 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 AMC Networks, you can compare the effects of market volatilities on Dave Busters and AMC Networks 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 AMC Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and AMC Networks.
Diversification Opportunities for Dave Busters and AMC Networks
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dave and AMC is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and AMC Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMC Networks 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 AMC Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMC Networks has no effect on the direction of Dave Busters i.e., Dave Busters and AMC Networks go up and down completely randomly.
Pair Corralation between Dave Busters and AMC Networks
Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the AMC Networks. But the stock apears to be less risky and, when comparing its historical volatility, Dave Busters Entertainment is 1.02 times less risky than AMC Networks. The stock trades about -0.03 of its potential returns per unit of risk. The AMC Networks is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 820.00 in AMC Networks on August 30, 2024 and sell it today you would earn a total of 127.00 from holding AMC Networks or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. AMC Networks
Performance |
| Timeline |
| Dave Busters Enterta |
| AMC Networks |
Dave Busters and AMC Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and AMC Networks
The main advantage of trading using opposite Dave Busters and AMC Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, AMC Networks 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 AMC Networks will offset losses from the drop in AMC Networks' long position.| Dave Busters vs. Chipotle Mexican Grill | Dave Busters vs. Yum Brands | Dave Busters vs. The Wendys Co | Dave Busters vs. McDonalds |
| AMC Networks vs. Nexstar Broadcasting Group | AMC Networks vs. News Corp B | AMC Networks vs. Fox Corp Class | AMC Networks vs. Liberty Media |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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