Correlation Between Dave Busters and Top KingWin

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

Diversification Opportunities for Dave Busters and Top KingWin

0.53

Correlation Coefficient

Dave Busters  Top KingWin

Very weak diversification

The 3 months correlation between Dave and Top is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Top KingWin Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top KingWin 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 Top KingWin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top KingWin has no effect on the direction of Dave Busters i.e., Dave Busters and Top KingWin go up and down completely randomly.

Pair Corralation between Dave Busters and Top KingWin

Given the investment horizon of 90 days Dave Busters Entertainment is expected to generate 0.6 times more return on investment than Top KingWin. However, Dave Busters Entertainment is 1.67 times less risky than Top KingWin. It trades about 0.07 of its potential returns per unit of risk. Top KingWin Ltd is currently generating about -0.28 per unit of risk. If you would invest  3,588  in Dave Busters Entertainment on September 4, 2024 and sell it today you would earn a total of  312.00  from holding Dave Busters Entertainment or generate 8.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	28.57%
Values	Daily Returns

Dave Busters Entertainment  vs.  Top KingWin Ltd

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.

Top KingWin

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Top KingWin Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly weak forward-looking indicators, Top KingWin demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dave Busters and Top KingWin

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

The idea behind Dave Busters Entertainment and Top KingWin Ltd 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.