Correlation Between Dave Busters and Bayer AG
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Bayer AG 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 Bayer AG 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 Bayer AG, you can compare the effects of market volatilities on Dave Busters and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Bayer AG.
Diversification Opportunities for Dave Busters and Bayer AG
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dave and Bayer is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Bayer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG has no effect on the direction of Dave Busters i.e., Dave Busters and Bayer AG go up and down completely randomly.
Pair Corralation between Dave Busters and Bayer AG
Given the investment horizon of 90 days Dave Busters Entertainment is expected to generate 1.34 times more return on investment than Bayer AG. However, Dave Busters is 1.34 times more volatile than Bayer AG. It trades about 0.02 of its potential returns per unit of risk. Bayer AG is currently generating about -0.08 per unit of risk. If you would invest 3,447 in Dave Busters Entertainment on September 5, 2024 and sell it today you would earn a total of 369.00 from holding Dave Busters Entertainment or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Dave Busters Entertainment vs. Bayer AG
Performance |
| Timeline |
| Dave Busters Enterta |
| Bayer AG |
Dave Busters and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Bayer AG
The main advantage of trading using opposite Dave Busters and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.| Dave Busters vs. Hyatt Hotels | Dave Busters vs. Smart Share Global | Dave Busters vs. Wyndham Hotels Resorts | Dave Busters vs. WW International |
| Bayer AG vs. Jabil Circuit | Bayer AG vs. Dave Busters Entertainment | Bayer AG vs. Bel Fuse A | Bayer AG vs. Arrow Electronics |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |