Correlation Between Dominos Pizza and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Dominos Pizza and Barings BDC 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 Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominos Pizza and Barings BDC, you can compare the effects of market volatilities on Dominos Pizza and Barings BDC 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 Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Barings BDC.
Diversification Opportunities for Dominos Pizza and Barings BDC
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dominos and Barings is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC 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 are associated (or correlated) with Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Barings BDC go up and down completely randomly.
Pair Corralation between Dominos Pizza and Barings BDC
Considering the 90-day investment horizon Dominos Pizza is expected to generate 1.12 times less return on investment than Barings BDC. In addition to that, Dominos Pizza is 1.79 times more volatile than Barings BDC. It trades about 0.22 of its total potential returns per unit of risk. Barings BDC is currently generating about 0.45 per unit of volatility. If you would invest 941.00 in Barings BDC on September 4, 2024 and sell it today you would earn a total of 92.00 from holding Barings BDC or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dominos Pizza vs. Barings BDC
Performance |
| Timeline |
| Dominos Pizza |
| Barings BDC |
Dominos Pizza and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominos Pizza and Barings BDC
The main advantage of trading using opposite Dominos Pizza and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, Barings BDC 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 Barings BDC will offset losses from the drop in Barings BDC's long position.| Dominos Pizza vs. Hyatt Hotels | Dominos Pizza vs. Smart Share Global | Dominos Pizza vs. Sweetgreen | Dominos Pizza vs. Wyndham Hotels Resorts |
| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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