Correlation Between Dave Busters and N2OFF

Can any of the company-specific risk be diversified away by investing in both Dave Busters and N2OFF 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 N2OFF 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 N2OFF Inc, you can compare the effects of market volatilities on Dave Busters and N2OFF 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 N2OFF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and N2OFF.

Diversification Opportunities for Dave Busters and N2OFF

-0.31

Correlation Coefficient

Dave Busters  N2OFF

Very good diversification

The 3 months correlation between Dave and N2OFF is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and N2OFF Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N2OFF 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 N2OFF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N2OFF Inc has no effect on the direction of Dave Busters i.e., Dave Busters and N2OFF go up and down completely randomly.

Pair Corralation between Dave Busters and N2OFF

Given the investment horizon of 90 days Dave Busters Entertainment is expected to generate 0.69 times more return on investment than N2OFF. However, Dave Busters Entertainment is 1.44 times less risky than N2OFF. It trades about -0.05 of its potential returns per unit of risk. N2OFF Inc is currently generating about -0.06 per unit of risk. If you would invest  3,203  in Dave Busters Entertainment on September 14, 2024 and sell it today you would lose (654.00) from holding Dave Busters Entertainment or give up 20.42% of portfolio value over 90 days.

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

Dave Busters Entertainment  vs.  N2OFF Inc

Dave Busters Enterta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dave Busters Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

N2OFF Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days N2OFF Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Dave Busters and N2OFF

The main advantage of trading using opposite Dave Busters and N2OFF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave Busters position performs unexpectedly, N2OFF 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 N2OFF will offset losses from the drop in N2OFF's long position.

The idea behind Dave Busters Entertainment and N2OFF Inc 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.