Correlation Between Dave Busters and Oakworth Capital

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

Diversification Opportunities for Dave Busters and Oakworth Capital

-0.76

Correlation Coefficient

Dave Busters  Oakworth Capital

Pay attention - limited upside

The 3 months correlation between Dave and Oakworth is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Oakworth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakworth Capital 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 Oakworth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakworth Capital has no effect on the direction of Dave Busters i.e., Dave Busters and Oakworth Capital go up and down completely randomly.

Pair Corralation between Dave Busters and Oakworth Capital

Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Oakworth Capital. In addition to that, Dave Busters is 3.86 times more volatile than Oakworth Capital. It trades about -0.15 of its total potential returns per unit of risk. Oakworth Capital is currently generating about 0.32 per unit of volatility. If you would invest  3,150  in Oakworth Capital on October 25, 2024 and sell it today you would earn a total of  200.00  from holding Oakworth Capital or generate 6.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

Dave Busters Entertainment  vs.  Oakworth Capital

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.

Oakworth Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oakworth Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting forward-looking signals, Oakworth Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dave Busters and Oakworth Capital

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

The idea behind Dave Busters Entertainment and Oakworth Capital 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.