Correlation Between Dave Busters and Kenon Holdings

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

Diversification Opportunities for Dave Busters and Kenon Holdings

-0.4

Correlation Coefficient

Dave Busters  Kenon Holdings

Very good diversification

The 3 months correlation between Dave and Kenon is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Dave Busters i.e., Dave Busters and Kenon Holdings go up and down completely randomly.

Pair Corralation between Dave Busters and Kenon Holdings

Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Kenon Holdings. In addition to that, Dave Busters is 1.92 times more volatile than Kenon Holdings. It trades about -0.18 of its total potential returns per unit of risk. Kenon Holdings is currently generating about 0.14 per unit of volatility. If you would invest  2,980  in Kenon Holdings on December 17, 2024 and sell it today you would earn a total of  545.00  from holding Kenon Holdings or generate 18.29% 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.  Kenon Holdings

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.

Kenon Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kenon Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Kenon Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dave Busters and Kenon Holdings

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

The idea behind Dave Busters Entertainment and Kenon Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.