Correlation Between Dave Busters and Hamilton Insurance

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

Diversification Opportunities for Dave Busters and Hamilton Insurance

-0.58

Correlation Coefficient

Dave Busters  Hamilton Insurance

Excellent diversification

The 3 months correlation between Dave and Hamilton is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, 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 Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Dave Busters i.e., Dave Busters and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Dave Busters and Hamilton Insurance

Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Hamilton Insurance. In addition to that, Dave Busters is 2.42 times more volatile than Hamilton Insurance Group,. It trades about -0.13 of its total potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.1 per unit of volatility. If you would invest  1,917  in Hamilton Insurance Group, on December 20, 2024 and sell it today you would earn a total of  186.00  from holding Hamilton Insurance Group, or generate 9.7% return on investment over 90 days.

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

Dave Busters Entertainment  vs.  Hamilton Insurance Group,

Dave Busters Enterta

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hamilton Insurance Group,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Hamilton Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Dave Busters and Hamilton Insurance

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

The idea behind Dave Busters Entertainment and Hamilton Insurance Group, 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.