Correlation Between Dominos Pizza and Stoneridge
Can any of the company-specific risk be diversified away by investing in both Dominos Pizza and Stoneridge 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 Stoneridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominos Pizza and Stoneridge, you can compare the effects of market volatilities on Dominos Pizza and Stoneridge 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 Stoneridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Stoneridge.
Diversification Opportunities for Dominos Pizza and Stoneridge
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dominos and Stoneridge is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza and Stoneridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stoneridge 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 Stoneridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stoneridge has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Stoneridge go up and down completely randomly.
Pair Corralation between Dominos Pizza and Stoneridge
Considering the 90-day investment horizon Dominos Pizza is expected to generate 0.28 times more return on investment than Stoneridge. However, Dominos Pizza is 3.61 times less risky than Stoneridge. It trades about 0.35 of its potential returns per unit of risk. Stoneridge is currently generating about -0.19 per unit of risk. If you would invest 41,314 in Dominos Pizza on August 30, 2024 and sell it today you would earn a total of 5,920 from holding Dominos Pizza or generate 14.33% 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. Stoneridge
Performance |
| Timeline |
| Dominos Pizza |
| Stoneridge |
Dominos Pizza and Stoneridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominos Pizza and Stoneridge
The main advantage of trading using opposite Dominos Pizza and Stoneridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, Stoneridge 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 Stoneridge will offset losses from the drop in Stoneridge's long position.| Dominos Pizza vs. Chipotle Mexican Grill | Dominos Pizza vs. Yum Brands | Dominos Pizza vs. The Wendys Co | Dominos Pizza vs. McDonalds |
| Stoneridge vs. Monro Muffler Brake | Stoneridge vs. Motorcar Parts of | Stoneridge vs. Standard Motor Products | Stoneridge vs. Douglas Dynamics |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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