Correlation Between Dave Busters and Bank of America
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Bank of America 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 Bank of America 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 Bank of America, you can compare the effects of market volatilities on Dave Busters and Bank of America 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 Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Bank of America.
Diversification Opportunities for Dave Busters and Bank of America
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dave and Bank is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of America 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 Bank of America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of America has no effect on the direction of Dave Busters i.e., Dave Busters and Bank of America go up and down completely randomly.
Pair Corralation between Dave Busters and Bank of America
Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Bank of America. In addition to that, Dave Busters is 10.09 times more volatile than Bank of America. It trades about -0.19 of its total potential returns per unit of risk. Bank of America is currently generating about -0.23 per unit of volatility. If you would invest 125,069 in Bank of America on October 1, 2024 and sell it today you would lose (3,721) from holding Bank of America or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. Bank of America
Performance |
| Timeline |
| Dave Busters Enterta |
| Bank of America |
Dave Busters and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Bank of America
The main advantage of trading using opposite Dave Busters and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Bank of America 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 Bank of America will offset losses from the drop in Bank of America's long position.| Dave Busters vs. Imax Corp | Dave Busters vs. Marcus | Dave Busters vs. AMC Networks | Dave Busters vs. Cinemark Holdings |
| Bank of America vs. Bank of America | Bank of America vs. Wells Fargo | Bank of America vs. Bank of America | Bank of America vs. China Construction Bank |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |