Correlation Between Dominos Pizza and Kinsale Capital
Can any of the company-specific risk be diversified away by investing in both Dominos Pizza and Kinsale Capital 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 Kinsale Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominos Pizza and Kinsale Capital Group, you can compare the effects of market volatilities on Dominos Pizza and Kinsale Capital 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 Kinsale Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Kinsale Capital.
Diversification Opportunities for Dominos Pizza and Kinsale Capital
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dominos and Kinsale is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza and Kinsale Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsale Capital Group 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 Kinsale Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsale Capital Group has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Kinsale Capital go up and down completely randomly.
Pair Corralation between Dominos Pizza and Kinsale Capital
Considering the 90-day investment horizon Dominos Pizza is expected to generate 1.48 times less return on investment than Kinsale Capital. But when comparing it to its historical volatility, Dominos Pizza is 1.47 times less risky than Kinsale Capital. It trades about 0.06 of its potential returns per unit of risk. Kinsale Capital Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 35,687 in Kinsale Capital Group on September 4, 2024 and sell it today you would earn a total of 14,240 from holding Kinsale Capital Group or generate 39.9% 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. Kinsale Capital Group
Performance |
| Timeline |
| Dominos Pizza |
| Kinsale Capital Group |
Dominos Pizza and Kinsale Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominos Pizza and Kinsale Capital
The main advantage of trading using opposite Dominos Pizza and Kinsale Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, Kinsale Capital 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 Kinsale Capital will offset losses from the drop in Kinsale Capital's long position.| Dominos Pizza vs. Hyatt Hotels | Dominos Pizza vs. Smart Share Global | Dominos Pizza vs. Sweetgreen | Dominos Pizza vs. Wyndham Hotels Resorts |
| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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