Correlation Between Dominos Pizza and U Power
Can any of the company-specific risk be diversified away by investing in both Dominos Pizza and U Power 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 U Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominos Pizza and U Power Limited, you can compare the effects of market volatilities on Dominos Pizza and U Power 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 U Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and U Power.
Diversification Opportunities for Dominos Pizza and U Power
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dominos and UCAR is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza and U Power Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Power Limited 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 U Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Power Limited has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and U Power go up and down completely randomly.
Pair Corralation between Dominos Pizza and U Power
Considering the 90-day investment horizon Dominos Pizza is expected to generate 0.39 times more return on investment than U Power. However, Dominos Pizza is 2.59 times less risky than U Power. It trades about 0.22 of its potential returns per unit of risk. U Power Limited is currently generating about -0.21 per unit of risk. If you would invest 42,998 in Dominos Pizza on September 4, 2024 and sell it today you would earn a total of 3,620 from holding Dominos Pizza or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dominos Pizza vs. U Power Limited
Performance |
| Timeline |
| Dominos Pizza |
| U Power Limited |
Dominos Pizza and U Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominos Pizza and U Power
The main advantage of trading using opposite Dominos Pizza and U Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, U Power 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 U Power will offset losses from the drop in U Power's long position.| Dominos Pizza vs. Hyatt Hotels | Dominos Pizza vs. Smart Share Global | Dominos Pizza vs. Sweetgreen | Dominos Pizza vs. Wyndham Hotels Resorts |
| U Power vs. Sonic Automotive | U Power vs. Lithia Motors | U Power vs. AutoNation | U Power vs. Penske Automotive Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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