Correlation Between Dave Busters and WESTERN REFINING

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

Diversification Opportunities for Dave Busters and WESTERN REFINING

0.0

Correlation Coefficient

Dave Busters  WESTERN REFINING

Pay attention - limited upside

The 3 months correlation between Dave and WESTERN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and WESTERN REFINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTERN REFINING 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 WESTERN REFINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTERN REFINING has no effect on the direction of Dave Busters i.e., Dave Busters and WESTERN REFINING go up and down completely randomly.

Pair Corralation between Dave Busters and WESTERN REFINING

If you would invest  2,980  in Dave Busters Entertainment on October 10, 2024 and sell it today you would lose (60.00) from holding Dave Busters Entertainment or give up 2.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Dave Busters Entertainment  vs.  WESTERN REFINING

Dave Busters Enterta

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dave Busters Entertainment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Dave Busters is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WESTERN REFINING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WESTERN REFINING has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, WESTERN REFINING is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Dave Busters and WESTERN REFINING

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

The idea behind Dave Busters Entertainment and WESTERN REFINING 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.