Correlation Between Dave Busters and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Dave Busters and National CineMedia 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 National CineMedia 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 National CineMedia, you can compare the effects of market volatilities on Dave Busters and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and National CineMedia.
Diversification Opportunities for Dave Busters and National CineMedia
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dave and National is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Dave Busters i.e., Dave Busters and National CineMedia go up and down completely randomly.
Pair Corralation between Dave Busters and National CineMedia
Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the National CineMedia. In addition to that, Dave Busters is 1.23 times more volatile than National CineMedia. It trades about -0.08 of its total potential returns per unit of risk. National CineMedia is currently generating about -0.07 per unit of volatility. If you would invest 720.00 in National CineMedia on August 28, 2024 and sell it today you would lose (40.00) from holding National CineMedia or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. National CineMedia
Performance |
| Timeline |
| Dave Busters Enterta |
| National CineMedia |
Dave Busters and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and National CineMedia
The main advantage of trading using opposite Dave Busters and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| Dave Busters vs. Imax Corp | Dave Busters vs. Marcus | Dave Busters vs. AMC Networks | Dave Busters vs. Cinemark Holdings |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Impact Fusion International | National CineMedia vs. ZW Data Action |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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