Correlation Between Dominos Pizza and Zapata Computing
Can any of the company-specific risk be diversified away by investing in both Dominos Pizza and Zapata Computing 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 Zapata Computing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dominos Pizza and Zapata Computing Holdings, you can compare the effects of market volatilities on Dominos Pizza and Zapata Computing 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 Zapata Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Zapata Computing.
Diversification Opportunities for Dominos Pizza and Zapata Computing
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dominos and Zapata is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza and Zapata Computing Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapata Computing Holdings 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 Zapata Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapata Computing Holdings has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Zapata Computing go up and down completely randomly.
Pair Corralation between Dominos Pizza and Zapata Computing
Considering the 90-day investment horizon Dominos Pizza is expected to generate 0.16 times more return on investment than Zapata Computing. However, Dominos Pizza is 6.39 times less risky than Zapata Computing. It trades about 0.05 of its potential returns per unit of risk. Zapata Computing Holdings is currently generating about -0.18 per unit of risk. If you would invest 39,468 in Dominos Pizza on August 29, 2024 and sell it today you would earn a total of 7,823 from holding Dominos Pizza or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.55% |
| Values | Daily Returns |
Dominos Pizza vs. Zapata Computing Holdings
Performance |
| Timeline |
| Dominos Pizza |
| Zapata Computing Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dominos Pizza and Zapata Computing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dominos Pizza and Zapata Computing
The main advantage of trading using opposite Dominos Pizza and Zapata Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, Zapata Computing 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 Zapata Computing will offset losses from the drop in Zapata Computing's long position.| Dominos Pizza vs. Brinker International | Dominos Pizza vs. Jack In The | Dominos Pizza vs. The Wendys Co | Dominos Pizza vs. Wingstop |
| Zapata Computing vs. Dennys Corp | Zapata Computing vs. Dominos Pizza | Zapata Computing vs. Cracker Barrel Old | Zapata Computing vs. CF Industries Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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