Correlation Between Domo and Pegasystems
Can any of the company-specific risk be diversified away by investing in both Domo and Pegasystems 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 Domo and Pegasystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Domo Inc and Pegasystems, you can compare the effects of market volatilities on Domo and Pegasystems 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 Domo with a short position of Pegasystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Domo and Pegasystems.
Diversification Opportunities for Domo and Pegasystems
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Domo and Pegasystems is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Domo Inc and Pegasystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasystems and Domo 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 Domo Inc are associated (or correlated) with Pegasystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasystems has no effect on the direction of Domo i.e., Domo and Pegasystems go up and down completely randomly.
Pair Corralation between Domo and Pegasystems
Given the investment horizon of 90 days Domo is expected to generate 6.59 times less return on investment than Pegasystems. But when comparing it to its historical volatility, Domo Inc is 1.04 times less risky than Pegasystems. It trades about 0.01 of its potential returns per unit of risk. Pegasystems is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,236 in Pegasystems on August 25, 2024 and sell it today you would earn a total of 3,916 from holding Pegasystems or generate 74.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Domo Inc vs. Pegasystems
Performance |
| Timeline |
| Domo Inc |
| Pegasystems |
Domo and Pegasystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Domo and Pegasystems
The main advantage of trading using opposite Domo and Pegasystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Domo position performs unexpectedly, Pegasystems 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 Pegasystems will offset losses from the drop in Pegasystems' long position.The idea behind Domo Inc and Pegasystems 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.| Pegasystems vs. Wex Inc | Pegasystems vs. Cognex | Pegasystems vs. Progress Software | Pegasystems vs. Fair Isaac |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |