Correlation Between Tarena International and Dave Busters
Can any of the company-specific risk be diversified away by investing in both Tarena International 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 Tarena International and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tarena International and Dave Busters Entertainment, you can compare the effects of market volatilities on Tarena International 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 Tarena International with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tarena International and Dave Busters.
Diversification Opportunities for Tarena International and Dave Busters
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tarena and Dave is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tarena International 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 Tarena International 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 Tarena International 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 Tarena International i.e., Tarena International and Dave Busters go up and down completely randomly.
Pair Corralation between Tarena International and Dave Busters
Given the investment horizon of 90 days Tarena International is expected to generate 2.84 times more return on investment than Dave Busters. However, Tarena International is 2.84 times more volatile than Dave Busters Entertainment. It trades about 0.03 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.01 per unit of risk. If you would invest 99.00 in Tarena International on September 2, 2024 and sell it today you would lose (16.00) from holding Tarena International or give up 16.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tarena International vs. Dave Busters Entertainment
Performance |
| Timeline |
| Tarena International |
| Dave Busters Enterta |
Tarena International and Dave Busters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tarena International and Dave Busters
The main advantage of trading using opposite Tarena International and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tarena International 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.| Tarena International vs. Catalent | Tarena International vs. Marine Products | Tarena International vs. BRP Inc | Tarena International vs. Brunswick |
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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