Correlation Between Kinetik Holdings and Dave Busters

Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and Dave Busters 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 Kinetik Holdings and Dave Busters into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinetik Holdings and Dave Busters Entertainment, you can compare the effects of market volatilities on Kinetik Holdings and Dave Busters 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 Kinetik Holdings with a short position of Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and Dave Busters.

Diversification Opportunities for Kinetik Holdings and Dave Busters

-0.53

Correlation Coefficient

Kinetik Holdings  Dave Busters

Excellent diversification

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

Pair Corralation between Kinetik Holdings and Dave Busters

Given the investment horizon of 90 days Kinetik Holdings is expected to generate 0.44 times more return on investment than Dave Busters. However, Kinetik Holdings is 2.27 times less risky than Dave Busters. It trades about 0.24 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.08 per unit of risk. If you would invest  4,892  in Kinetik Holdings on October 26, 2024 and sell it today you would earn a total of  1,689  from holding Kinetik Holdings or generate 34.53% return on investment over 90 days.

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

Kinetik Holdings  vs.  Dave Busters Entertainment

Kinetik Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Kinetik Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kinetik Holdings and Dave Busters

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

The idea behind Kinetik Holdings and Dave Busters Entertainment 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.