Correlation Between Dave Busters and Cintas
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Cintas 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 Cintas 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 Cintas, you can compare the effects of market volatilities on Dave Busters and Cintas 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 Cintas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Cintas.
Diversification Opportunities for Dave Busters and Cintas
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dave and Cintas is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas 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 Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of Dave Busters i.e., Dave Busters and Cintas go up and down completely randomly.
Pair Corralation between Dave Busters and Cintas
Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Cintas. In addition to that, Dave Busters is 3.09 times more volatile than Cintas. It trades about -0.06 of its total potential returns per unit of risk. Cintas is currently generating about 0.4 per unit of volatility. If you would invest 18,270 in Cintas on November 1, 2024 and sell it today you would earn a total of 1,948 from holding Cintas or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. Cintas
Performance |
| Timeline |
| Dave Busters Enterta |
| Cintas |
Dave Busters and Cintas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Cintas
The main advantage of trading using opposite Dave Busters and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Cintas 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 Cintas will offset losses from the drop in Cintas' long position.| Dave Busters vs. Imax Corp | Dave Busters vs. Marcus | Dave Busters vs. AMC Networks | Dave Busters vs. Cinemark Holdings |
| Cintas vs. ABM Industries Incorporated | Cintas vs. Copart Inc | Cintas vs. Dolby Laboratories | Cintas vs. Relx PLC ADR |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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