Correlation Between Domo and EPlus

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Can any of the company-specific risk be diversified away by investing in both Domo and EPlus 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 EPlus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Domo Inc and ePlus inc, you can compare the effects of market volatilities on Domo and EPlus 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 EPlus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Domo and EPlus.

Diversification Opportunities for Domo and EPlus

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Domo and EPlus is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Domo Inc and ePlus inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ePlus inc 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 EPlus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ePlus inc has no effect on the direction of Domo i.e., Domo and EPlus go up and down completely randomly.

Pair Corralation between Domo and EPlus

Given the investment horizon of 90 days Domo Inc is expected to under-perform the EPlus. In addition to that, Domo is 1.36 times more volatile than ePlus inc. It trades about -0.03 of its total potential returns per unit of risk. ePlus inc is currently generating about 0.04 per unit of volatility. If you would invest  6,807  in ePlus inc on November 3, 2024 and sell it today you would earn a total of  1,183  from holding ePlus inc or generate 17.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Domo Inc  vs.  ePlus inc

 Performance 
       Timeline  
Domo Inc 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Domo Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Domo may actually be approaching a critical reversion point that can send shares even higher in March 2025.
ePlus inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ePlus inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Domo and EPlus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Domo and EPlus

The main advantage of trading using opposite Domo and EPlus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Domo position performs unexpectedly, EPlus 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 EPlus will offset losses from the drop in EPlus' long position.
The idea behind Domo Inc and ePlus inc 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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