Correlation Between Dave Busters and NIP Group
Can any of the company-specific risk be diversified away by investing in both Dave Busters and NIP Group 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 NIP Group 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 NIP Group American, you can compare the effects of market volatilities on Dave Busters and NIP Group 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 NIP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and NIP Group.
Diversification Opportunities for Dave Busters and NIP Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dave and NIP is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and NIP Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIP Group American 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 NIP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIP Group American has no effect on the direction of Dave Busters i.e., Dave Busters and NIP Group go up and down completely randomly.
Pair Corralation between Dave Busters and NIP Group
Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the NIP Group. But the stock apears to be less risky and, when comparing its historical volatility, Dave Busters Entertainment is 3.03 times less risky than NIP Group. The stock trades about -0.05 of its potential returns per unit of risk. The NIP Group American is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 902.00 in NIP Group American on September 2, 2024 and sell it today you would lose (257.00) from holding NIP Group American or give up 28.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
Dave Busters Entertainment vs. NIP Group American
Performance |
| Timeline |
| Dave Busters Enterta |
| NIP Group American |
Dave Busters and NIP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and NIP Group
The main advantage of trading using opposite Dave Busters and NIP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, NIP Group 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 NIP Group will offset losses from the drop in NIP Group's long position.The idea behind Dave Busters Entertainment and NIP Group American 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.| NIP Group vs. Vera Bradley | NIP Group vs. Nike Inc | NIP Group vs. JD Sports Fashion | NIP Group vs. Burlington Stores |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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