Correlation Between Dave Busters and Fuji Media

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

Diversification Opportunities for Dave Busters and Fuji Media

-0.19

Correlation Coefficient

Dave Busters  Fuji Media

Good diversification

The 3 months correlation between Dave and Fuji is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Fuji Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuji Media 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 Fuji Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuji Media Holdings has no effect on the direction of Dave Busters i.e., Dave Busters and Fuji Media go up and down completely randomly.

Pair Corralation between Dave Busters and Fuji Media

Assuming the 90 days horizon Dave Busters Entertainment is expected to under-perform the Fuji Media. In addition to that, Dave Busters is 1.25 times more volatile than Fuji Media Holdings. It trades about -0.19 of its total potential returns per unit of risk. Fuji Media Holdings is currently generating about -0.02 per unit of volatility. If you would invest  1,110  in Fuji Media Holdings on October 23, 2024 and sell it today you would lose (20.00) from holding Fuji Media Holdings or give up 1.8% 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.  Fuji Media Holdings

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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Fuji Media Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fuji Media Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Fuji Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dave Busters and Fuji Media

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

The idea behind Dave Busters Entertainment and Fuji Media 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.