Correlation Between Dave Busters and Lipocine
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Lipocine 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 Lipocine 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 Lipocine, you can compare the effects of market volatilities on Dave Busters and Lipocine 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 Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Lipocine.
Diversification Opportunities for Dave Busters and Lipocine
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dave and Lipocine is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine 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 Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Dave Busters i.e., Dave Busters and Lipocine go up and down completely randomly.
Pair Corralation between Dave Busters and Lipocine
Given the investment horizon of 90 days Dave Busters Entertainment is expected to generate 0.64 times more return on investment than Lipocine. However, Dave Busters Entertainment is 1.57 times less risky than Lipocine. It trades about 0.04 of its potential returns per unit of risk. Lipocine is currently generating about -0.2 per unit of risk. If you would invest 3,856 in Dave Busters Entertainment on September 2, 2024 and sell it today you would earn a total of 76.00 from holding Dave Busters Entertainment or generate 1.97% 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. Lipocine
Performance |
| Timeline |
| Dave Busters Enterta |
| Lipocine |
Dave Busters and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Lipocine
The main advantage of trading using opposite Dave Busters and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Lipocine 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 Lipocine will offset losses from the drop in Lipocine's long position.The idea behind Dave Busters Entertainment and Lipocine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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