Correlation Between Dave Busters and Roku
Can any of the company-specific risk be diversified away by investing in both Dave Busters and Roku 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 Roku 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 Roku Inc, you can compare the effects of market volatilities on Dave Busters and Roku 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 Roku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and Roku.
Diversification Opportunities for Dave Busters and Roku
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dave and Roku is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Roku Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roku Inc 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 Roku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roku Inc has no effect on the direction of Dave Busters i.e., Dave Busters and Roku go up and down completely randomly.
Pair Corralation between Dave Busters and Roku
Given the investment horizon of 90 days Dave Busters Entertainment is expected to generate 0.77 times more return on investment than Roku. However, Dave Busters Entertainment is 1.3 times less risky than Roku. It trades about 0.04 of its potential returns per unit of risk. Roku Inc is currently generating about -0.08 per unit of risk. If you would invest 3,870 in Dave Busters Entertainment on August 31, 2024 and sell it today you would earn a total of 62.00 from holding Dave Busters Entertainment or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dave Busters Entertainment vs. Roku Inc
Performance |
| Timeline |
| Dave Busters Enterta |
| Roku Inc |
Dave Busters and Roku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dave Busters and Roku
The main advantage of trading using opposite Dave Busters and Roku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, Roku 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 Roku will offset losses from the drop in Roku's long position.| Dave Busters vs. Imax Corp | Dave Busters vs. Marcus | Dave Busters vs. AMC Networks | Dave Busters vs. Cinemark Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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