Correlation Between Abcellera Biologics and Dave Busters

Can any of the company-specific risk be diversified away by investing in both Abcellera Biologics 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 Abcellera Biologics and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abcellera Biologics and Dave Busters Entertainment, you can compare the effects of market volatilities on Abcellera Biologics 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 Abcellera Biologics with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abcellera Biologics and Dave Busters.

Diversification Opportunities for Abcellera Biologics and Dave Busters

0.65

Correlation Coefficient

Abcellera Biologics  Dave Busters

Poor diversification

The 3 months correlation between Abcellera and Dave is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Abcellera Biologics 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 Abcellera Biologics 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 Abcellera Biologics 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 Abcellera Biologics i.e., Abcellera Biologics and Dave Busters go up and down completely randomly.

Pair Corralation between Abcellera Biologics and Dave Busters

Given the investment horizon of 90 days Abcellera Biologics is expected to generate 1.18 times more return on investment than Dave Busters. However, Abcellera Biologics is 1.18 times more volatile than Dave Busters Entertainment. It trades about -0.04 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.15 per unit of risk. If you would invest  315.00  in Abcellera Biologics on September 12, 2024 and sell it today you would lose (13.00) from holding Abcellera Biologics or give up 4.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Abcellera Biologics  vs.  Dave Busters Entertainment

Abcellera Biologics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Abcellera Biologics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Abcellera Biologics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dave Busters Enterta

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dave Busters Entertainment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Dave Busters showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Abcellera Biologics and Dave Busters

The main advantage of trading using opposite Abcellera Biologics and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abcellera Biologics 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 Abcellera Biologics 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.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.