Correlation Between Dave Busters and Shimmick Common

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

Diversification Opportunities for Dave Busters and Shimmick Common

0.9

Correlation Coefficient

Dave Busters  Shimmick Common

Almost no diversification

The 3 months correlation between Dave and Shimmick is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and Shimmick Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimmick Common 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 Shimmick Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimmick Common has no effect on the direction of Dave Busters i.e., Dave Busters and Shimmick Common go up and down completely randomly.

Pair Corralation between Dave Busters and Shimmick Common

Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the Shimmick Common. But the stock apears to be less risky and, when comparing its historical volatility, Dave Busters Entertainment is 1.15 times less risky than Shimmick Common. The stock trades about -0.13 of its potential returns per unit of risk. The Shimmick Common is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  246.00  in Shimmick Common on December 20, 2024 and sell it today you would lose (77.00) from holding Shimmick Common or give up 31.3% of portfolio value over 90 days.

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

Dave Busters Entertainment  vs.  Shimmick Common

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.

Shimmick Common

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shimmick Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Dave Busters and Shimmick Common

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

The idea behind Dave Busters Entertainment and Shimmick Common 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.