Correlation Between Dave Busters and Jackson Financial

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

Diversification Opportunities for Dave Busters and Jackson Financial

0.24

Correlation Coefficient

Dave Busters  Jackson Financial

Modest diversification

The 3 months correlation between Dave and Jackson is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Jackson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Financial 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 Jackson Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackson Financial has no effect on the direction of Dave Busters i.e., Dave Busters and Jackson Financial go up and down completely randomly.

Pair Corralation between Dave Busters and Jackson Financial

Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Jackson Financial. In addition to that, Dave Busters is 2.94 times more volatile than Jackson Financial. It trades about -0.01 of its total potential returns per unit of risk. Jackson Financial is currently generating about 0.04 per unit of volatility. If you would invest  2,167  in Jackson Financial on October 11, 2024 and sell it today you would earn a total of  468.00  from holding Jackson Financial or generate 21.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.94%
Values	Daily Returns

Dave Busters Entertainment  vs.  Jackson Financial

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.

Jackson Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jackson Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jackson Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dave Busters and Jackson Financial

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

The idea behind Dave Busters Entertainment and Jackson Financial 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.