Correlation Between Dave Busters and Citi Trends
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Citi Trends 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 Citi Trends 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 Citi Trends, you can compare the effects of market volatilities on Dave Busters and Citi Trends 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 Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Citi Trends.
Diversification Opportunities for Dave Busters and Citi Trends
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dave and Citi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends 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 Citi Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citi Trends has no effect on the direction of Dave Busters i.e., Dave Busters and Citi Trends go up and down completely randomly.
Pair Corralation between Dave Busters and Citi Trends
Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Citi Trends. In addition to that, Dave Busters is 1.08 times more volatile than Citi Trends. It trades about -0.05 of its total potential returns per unit of risk. Citi Trends is currently generating about -0.04 per unit of volatility. If you would invest 2,465 in Citi Trends on September 1, 2024 and sell it today you would lose (470.00) from holding Citi Trends or give up 19.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. Citi Trends
Performance |
| Timeline |
| Dave Busters Enterta |
| Citi Trends |
Dave Busters and Citi Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Citi Trends
The main advantage of trading using opposite Dave Busters and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Citi Trends 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 Citi Trends will offset losses from the drop in Citi Trends' long position.| Dave Busters vs. The Wendys Co | Dave Busters vs. Shake Shack | Dave Busters vs. Papa Johns International | Dave Busters vs. Darden Restaurants |
| Citi Trends vs. JJill Inc | Citi Trends vs. Zumiez Inc | Citi Trends vs. Tillys Inc | Citi Trends vs. Duluth 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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