Correlation Between Dave Busters and Pinstripes Holdings

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

Diversification Opportunities for Dave Busters and Pinstripes Holdings

-0.5

Correlation Coefficient

Dave Busters  Pinstripes Holdings

Very good diversification

The 3 months correlation between Dave and Pinstripes is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes Holdings 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 Pinstripes Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinstripes Holdings has no effect on the direction of Dave Busters i.e., Dave Busters and Pinstripes Holdings go up and down completely randomly.

Pair Corralation between Dave Busters and Pinstripes Holdings

Given the investment horizon of 90 days Dave Busters Entertainment is expected to generate 0.4 times more return on investment than Pinstripes Holdings. However, Dave Busters Entertainment is 2.47 times less risky than Pinstripes Holdings. It trades about 0.12 of its potential returns per unit of risk. Pinstripes Holdings is currently generating about -0.11 per unit of risk. If you would invest  3,027  in Dave Busters Entertainment on September 5, 2024 and sell it today you would earn a total of  789.00  from holding Dave Busters Entertainment or generate 26.07% return on investment over 90 days.

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

Dave Busters Entertainment  vs.  Pinstripes Holdings

Dave Busters Enterta

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dave Busters Entertainment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Dave Busters showed solid returns over the last few months and may actually be approaching a breakup point.

Pinstripes Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinstripes Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Dave Busters and Pinstripes Holdings

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

The idea behind Dave Busters Entertainment and Pinstripes Holdings 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.