Correlation Between Dave Busters and American Picture
Can any of the company-specific risk be diversified away by investing in both Dave Busters and American Picture 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 American Picture 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 American Picture House, you can compare the effects of market volatilities on Dave Busters and American Picture 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 American Picture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and American Picture.
Diversification Opportunities for Dave Busters and American Picture
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dave and American is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and American Picture House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Picture House 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 American Picture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Picture House has no effect on the direction of Dave Busters i.e., Dave Busters and American Picture go up and down completely randomly.
Pair Corralation between Dave Busters and American Picture
Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the American Picture. But the stock apears to be less risky and, when comparing its historical volatility, Dave Busters Entertainment is 3.5 times less risky than American Picture. The stock trades about -0.01 of its potential returns per unit of risk. The American Picture House is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 30.00 in American Picture House on August 26, 2024 and sell it today you would lose (1.00) from holding American Picture House or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. American Picture House
Performance |
| Timeline |
| Dave Busters Enterta |
| American Picture House |
Dave Busters and American Picture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and American Picture
The main advantage of trading using opposite Dave Busters and American Picture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, American Picture 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 American Picture will offset losses from the drop in American Picture's long position.| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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