Correlation Between Dominos Pizza and IGG
Can any of the company-specific risk be diversified away by investing in both Dominos Pizza and IGG 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 Dominos Pizza and IGG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominos Pizza Group and IGG Inc, you can compare the effects of market volatilities on Dominos Pizza and IGG 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 Dominos Pizza with a short position of IGG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and IGG.
Diversification Opportunities for Dominos Pizza and IGG
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dominos and IGG is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza Group and IGG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGG Inc and Dominos Pizza 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 Dominos Pizza Group are associated (or correlated) with IGG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGG Inc has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and IGG go up and down completely randomly.
Pair Corralation between Dominos Pizza and IGG
Assuming the 90 days horizon Dominos Pizza Group is expected to under-perform the IGG. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dominos Pizza Group is 7.49 times less risky than IGG. The pink sheet trades about -0.08 of its potential returns per unit of risk. The IGG Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 42.00 in IGG Inc on September 1, 2024 and sell it today you would earn a total of 6.00 from holding IGG Inc or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 58.38% |
| Values | Daily Returns |
Dominos Pizza Group vs. IGG Inc
Performance |
| Timeline |
| Dominos Pizza Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IGG Inc |
Dominos Pizza and IGG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominos Pizza and IGG
The main advantage of trading using opposite Dominos Pizza and IGG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, IGG 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 IGG will offset losses from the drop in IGG's long position.| Dominos Pizza vs. Equinix | Dominos Pizza vs. Perseus Mining Limited | Dominos Pizza vs. Mills Music Trust | Dominos Pizza vs. Tencent Music Entertainment |
| IGG vs. CD Projekt SA | IGG vs. Sega Sammy Holdings | IGG vs. Playtika Holding Corp | IGG vs. Square Enix Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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