Correlation Between Dave Busters and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Lifevantage 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 Lifevantage 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 Lifevantage, you can compare the effects of market volatilities on Dave Busters and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Lifevantage.
Diversification Opportunities for Dave Busters and Lifevantage
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dave and Lifevantage is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Dave Busters i.e., Dave Busters and Lifevantage go up and down completely randomly.
Pair Corralation between Dave Busters and Lifevantage
Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Lifevantage. In addition to that, Dave Busters is 1.02 times more volatile than Lifevantage. It trades about -0.02 of its total potential returns per unit of risk. Lifevantage is currently generating about 0.15 per unit of volatility. If you would invest 1,293 in Lifevantage on August 31, 2024 and sell it today you would earn a total of 147.00 from holding Lifevantage or generate 11.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. Lifevantage
Performance |
| Timeline |
| Dave Busters Enterta |
| Lifevantage |
Dave Busters and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Lifevantage
The main advantage of trading using opposite Dave Busters and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.| Dave Busters vs. Imax Corp | Dave Busters vs. Marcus | Dave Busters vs. AMC Networks | Dave Busters vs. Cinemark Holdings |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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