Correlation Between Mobix Labs and Dave Busters

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

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

Diversification Opportunities for Mobix Labs and Dave Busters

-0.71

Correlation Coefficient

Mobix Labs  Dave Busters

Pay attention - limited upside

The 3 months correlation between Mobix and Dave is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mobix Labs 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 Mobix Labs 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 Mobix Labs 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 Mobix Labs i.e., Mobix Labs and Dave Busters go up and down completely randomly.

Pair Corralation between Mobix Labs and Dave Busters

Given the investment horizon of 90 days Mobix Labs is expected to under-perform the Dave Busters. In addition to that, Mobix Labs is 2.44 times more volatile than Dave Busters Entertainment. It trades about -0.01 of its total potential returns per unit of risk. Dave Busters Entertainment is currently generating about -0.01 per unit of volatility. If you would invest  4,207  in Dave Busters Entertainment on October 3, 2024 and sell it today you would lose (1,288) from holding Dave Busters Entertainment or give up 30.62% of portfolio value over 90 days.

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

Mobix Labs  vs.  Dave Busters Entertainment

Mobix Labs

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mobix Labs are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental drivers, Mobix Labs showed 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 fairly strong basic indicators, Dave Busters is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mobix Labs and Dave Busters

The main advantage of trading using opposite Mobix Labs and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobix Labs 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 Mobix Labs 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..