Correlation Between Dave Busters and Marcus
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Marcus 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 Marcus 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 Marcus, you can compare the effects of market volatilities on Dave Busters and Marcus 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 Marcus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Marcus.
Diversification Opportunities for Dave Busters and Marcus
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dave and Marcus is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus 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 Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of Dave Busters i.e., Dave Busters and Marcus go up and down completely randomly.
Pair Corralation between Dave Busters and Marcus
Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Marcus. In addition to that, Dave Busters is 1.22 times more volatile than Marcus. It trades about -0.03 of its total potential returns per unit of risk. Marcus is currently generating about 0.44 per unit of volatility. If you would invest 1,676 in Marcus on August 30, 2024 and sell it today you would earn a total of 572.00 from holding Marcus or generate 34.13% 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. Marcus
Performance |
| Timeline |
| Dave Busters Enterta |
| Marcus |
Dave Busters and Marcus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Marcus
The main advantage of trading using opposite Dave Busters and Marcus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Marcus 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 Marcus will offset losses from the drop in Marcus' long position.| Dave Busters vs. Chipotle Mexican Grill | Dave Busters vs. Yum Brands | Dave Busters vs. The Wendys Co | Dave Busters vs. McDonalds |
| Marcus vs. News Corp A | Marcus vs. Liberty Media | Marcus vs. Warner Music Group | Marcus vs. Fox Corp Class |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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