Correlation Between Dave Busters and MicroStrategy Incorporated

Can any of the company-specific risk be diversified away by investing in both Dave Busters and MicroStrategy Incorporated 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 MicroStrategy Incorporated 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 MicroStrategy Incorporated 1000, you can compare the effects of market volatilities on Dave Busters and MicroStrategy Incorporated 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 MicroStrategy Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dave Busters and MicroStrategy Incorporated.

Diversification Opportunities for Dave Busters and MicroStrategy Incorporated

0.54

Correlation Coefficient

Dave Busters  MicroStrategy Incorporated

Very weak diversification

The 3 months correlation between Dave and MicroStrategy is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dave Busters Entertainment and MicroStrategy Incorporated 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroStrategy Incorporated 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 MicroStrategy Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroStrategy Incorporated has no effect on the direction of Dave Busters i.e., Dave Busters and MicroStrategy Incorporated go up and down completely randomly.

Pair Corralation between Dave Busters and MicroStrategy Incorporated

Given the investment horizon of 90 days Dave Busters Entertainment is expected to under-perform the MicroStrategy Incorporated. In addition to that, Dave Busters is 2.89 times more volatile than MicroStrategy Incorporated 1000. It trades about -0.2 of its total potential returns per unit of risk. MicroStrategy Incorporated 1000 is currently generating about -0.01 per unit of volatility. If you would invest  11,760  in MicroStrategy Incorporated 1000 on July 6, 2025 and sell it today you would lose (161.00) from holding MicroStrategy Incorporated 1000 or give up 1.37% of portfolio value over 90 days.

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

Dave Busters Entertainment  vs.  MicroStrategy Incorporated 100

Dave Busters Enterta

Risk-Adjusted Performance

Weakest

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 November 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MicroStrategy Incorporated

Risk-Adjusted Performance

Weakest

Over the last 90 days MicroStrategy Incorporated 1000 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MicroStrategy Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Dave Busters and MicroStrategy Incorporated

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

The idea behind Dave Busters Entertainment and MicroStrategy Incorporated 1000 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.