Correlation Between Dave Busters and ALLTEL

Can any of the company-specific risk be diversified away by investing in both Dave Busters and ALLTEL 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 ALLTEL 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 ALLTEL P 68, you can compare the effects of market volatilities on Dave Busters and ALLTEL 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 ALLTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and ALLTEL.

Diversification Opportunities for Dave Busters and ALLTEL

-0.21

Correlation Coefficient

Dave Busters  ALLTEL

Very good diversification

The 3 months correlation between Dave and ALLTEL is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and ALLTEL P 68 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLTEL P 68 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 ALLTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLTEL P 68 has no effect on the direction of Dave Busters i.e., Dave Busters and ALLTEL go up and down completely randomly.

Pair Corralation between Dave Busters and ALLTEL

Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the ALLTEL. In addition to that, Dave Busters is 3.86 times more volatile than ALLTEL P 68. It trades about -0.13 of its total potential returns per unit of risk. ALLTEL P 68 is currently generating about 0.08 per unit of volatility. If you would invest  10,361  in ALLTEL P 68 on December 23, 2024 and sell it today you would earn a total of  162.00  from holding ALLTEL P 68 or generate 1.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	31.15%
Values	Daily Returns

Dave Busters Entertainment  vs.  ALLTEL P 68

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.

ALLTEL P 68

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ALLTEL P 68 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ALLTEL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dave Busters and ALLTEL

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

The idea behind Dave Busters Entertainment and ALLTEL P 68 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.