Correlation Between Dominos Pizza and Kandi Technologies
Can any of the company-specific risk be diversified away by investing in both Dominos Pizza and Kandi Technologies 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 Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominos Pizza and Kandi Technologies Group, you can compare the effects of market volatilities on Dominos Pizza and Kandi Technologies 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 Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Kandi Technologies.
Diversification Opportunities for Dominos Pizza and Kandi Technologies
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dominos and Kandi is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies 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 Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Kandi Technologies go up and down completely randomly.
Pair Corralation between Dominos Pizza and Kandi Technologies
Considering the 90-day investment horizon Dominos Pizza is expected to generate 0.6 times more return on investment than Kandi Technologies. However, Dominos Pizza is 1.66 times less risky than Kandi Technologies. It trades about 0.04 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.03 per unit of risk. If you would invest 35,365 in Dominos Pizza on September 2, 2024 and sell it today you would earn a total of 12,254 from holding Dominos Pizza or generate 34.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dominos Pizza vs. Kandi Technologies Group
Performance |
| Timeline |
| Dominos Pizza |
| Kandi Technologies |
Dominos Pizza and Kandi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominos Pizza and Kandi Technologies
The main advantage of trading using opposite Dominos Pizza and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, Kandi Technologies 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 Kandi Technologies will offset losses from the drop in Kandi Technologies' long position.The idea behind Dominos Pizza and Kandi Technologies Group 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.| Kandi Technologies vs. Hyliion Holdings Corp | Kandi Technologies vs. Foresight Autonomous Holdings | Kandi Technologies vs. Aeva Technologies | Kandi Technologies vs. Aeye Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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