Correlation Between Dave Busters and Onyx Acquisition
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Onyx Acquisition 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 Onyx Acquisition 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 Onyx Acquisition Co, you can compare the effects of market volatilities on Dave Busters and Onyx Acquisition 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 Onyx Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Onyx Acquisition.
Diversification Opportunities for Dave Busters and Onyx Acquisition
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dave and Onyx is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Onyx Acquisition Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onyx Acquisition 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 Onyx Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onyx Acquisition has no effect on the direction of Dave Busters i.e., Dave Busters and Onyx Acquisition go up and down completely randomly.
Pair Corralation between Dave Busters and Onyx Acquisition
Given the investment horizon of 90 days Dave Busters Entertainment is expected to generate 2.89 times more return on investment than Onyx Acquisition. However, Dave Busters is 2.89 times more volatile than Onyx Acquisition Co. It trades about 0.02 of its potential returns per unit of risk. Onyx Acquisition Co is currently generating about 0.01 per unit of risk. If you would invest 3,866 in Dave Busters Entertainment on September 2, 2024 and sell it today you would earn a total of 66.00 from holding Dave Busters Entertainment or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.7% |
| Values | Daily Returns |
Dave Busters Entertainment vs. Onyx Acquisition Co
Performance |
| Timeline |
| Dave Busters Enterta |
| Onyx Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Dave Busters and Onyx Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Onyx Acquisition
The main advantage of trading using opposite Dave Busters and Onyx Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Onyx Acquisition 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 Onyx Acquisition will offset losses from the drop in Onyx Acquisition's long position.The idea behind Dave Busters Entertainment and Onyx Acquisition Co 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.| Onyx Acquisition vs. China Tontine Wines | Onyx Acquisition vs. Supercom | Onyx Acquisition vs. Celsius Holdings | Onyx Acquisition vs. Constellation Brands 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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