Correlation Between Dave Busters and Croghan Bancshares
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Croghan Bancshares 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 Croghan Bancshares 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 Croghan Bancshares, you can compare the effects of market volatilities on Dave Busters and Croghan Bancshares 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 Croghan Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Croghan Bancshares.
Diversification Opportunities for Dave Busters and Croghan Bancshares
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dave and Croghan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Croghan Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croghan Bancshares 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 Croghan Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croghan Bancshares has no effect on the direction of Dave Busters i.e., Dave Busters and Croghan Bancshares go up and down completely randomly.
Pair Corralation between Dave Busters and Croghan Bancshares
Given the investment horizon of 90 days Dave Busters is expected to generate 1.36 times less return on investment than Croghan Bancshares. But when comparing it to its historical volatility, Dave Busters Entertainment is 1.12 times less risky than Croghan Bancshares. It trades about 0.01 of its potential returns per unit of risk. Croghan Bancshares is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,700 in Croghan Bancshares on September 12, 2024 and sell it today you would lose (703.00) from holding Croghan Bancshares or give up 12.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.24% |
| Values | Daily Returns |
Dave Busters Entertainment vs. Croghan Bancshares
Performance |
| Timeline |
| Dave Busters Enterta |
| Croghan Bancshares |
Dave Busters and Croghan Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Croghan Bancshares
The main advantage of trading using opposite Dave Busters and Croghan Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Croghan Bancshares 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 Croghan Bancshares will offset losses from the drop in Croghan Bancshares' long position.| Dave Busters vs. Imax Corp | Dave Busters vs. Marcus | Dave Busters vs. AMC Networks | Dave Busters vs. Cinemark Holdings |
| Croghan Bancshares vs. Lifevantage | Croghan Bancshares vs. Olympic Steel | Croghan Bancshares vs. Magnite | Croghan Bancshares vs. Flexible Solutions International |
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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