Correlation Between Barings BDC and Dominos Pizza
Can any of the company-specific risk be diversified away by investing in both Barings BDC and Dominos Pizza 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 Barings BDC and Dominos Pizza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings BDC and Dominos Pizza, you can compare the effects of market volatilities on Barings BDC and Dominos Pizza 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 Barings BDC with a short position of Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings BDC and Dominos Pizza.
Diversification Opportunities for Barings BDC and Dominos Pizza
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Dominos is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Barings BDC and Dominos Pizza in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza and Barings BDC 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 Barings BDC are associated (or correlated) with Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza has no effect on the direction of Barings BDC i.e., Barings BDC and Dominos Pizza go up and down completely randomly.
Pair Corralation between Barings BDC and Dominos Pizza
Given the investment horizon of 90 days Barings BDC is expected to generate 0.64 times more return on investment than Dominos Pizza. However, Barings BDC is 1.57 times less risky than Dominos Pizza. It trades about 0.18 of its potential returns per unit of risk. Dominos Pizza is currently generating about 0.06 per unit of risk. If you would invest 951.00 in Barings BDC on September 12, 2024 and sell it today you would earn a total of 33.00 from holding Barings BDC or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings BDC vs. Dominos Pizza
Performance |
| Timeline |
| Barings BDC |
| Dominos Pizza |
Barings BDC and Dominos Pizza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings BDC and Dominos Pizza
The main advantage of trading using opposite Barings BDC and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings BDC position performs unexpectedly, Dominos Pizza 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 Dominos Pizza will offset losses from the drop in Dominos Pizza's long position.| Barings BDC vs. Victory Integrity Smallmid Cap | Barings BDC vs. Hilton Worldwide Holdings | Barings BDC vs. NVIDIA | Barings BDC vs. JPMorgan Chase Co |
| Dominos Pizza vs. Brinker International | Dominos Pizza vs. Jack In The | Dominos Pizza vs. The Wendys Co | Dominos Pizza vs. Wingstop |
Check out your portfolio center.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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