Correlation Between Saia and Dave Busters
Can any of the company-specific risk be diversified away by investing in both Saia and Dave Busters 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 Saia and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saia Inc and Dave Busters Entertainment, you can compare the effects of market volatilities on Saia and Dave Busters 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 Saia with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saia and Dave Busters.
Diversification Opportunities for Saia and Dave Busters
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saia and Dave is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Dave Busters Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Busters Enterta and Saia 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 Saia Inc are associated (or correlated) with Dave Busters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Busters Enterta has no effect on the direction of Saia i.e., Saia and Dave Busters go up and down completely randomly.
Pair Corralation between Saia and Dave Busters
Given the investment horizon of 90 days Saia Inc is expected to generate 0.94 times more return on investment than Dave Busters. However, Saia Inc is 1.07 times less risky than Dave Busters. It trades about 0.23 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.03 per unit of risk. If you would invest 47,699 in Saia Inc on August 30, 2024 and sell it today you would earn a total of 8,739 from holding Saia Inc or generate 18.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saia Inc vs. Dave Busters Entertainment
Performance |
| Timeline |
| Saia Inc |
| Dave Busters Enterta |
Saia and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saia and Dave Busters
The main advantage of trading using opposite Saia and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia position performs unexpectedly, Dave Busters 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 Dave Busters will offset losses from the drop in Dave Busters' long position.The idea behind Saia Inc and Dave Busters Entertainment 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.| Dave Busters vs. Chipotle Mexican Grill | Dave Busters vs. Yum Brands | Dave Busters vs. The Wendys Co | Dave Busters vs. McDonalds |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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