Correlation Between IGG and Dominos Pizza
Can any of the company-specific risk be diversified away by investing in both IGG and Dominos Pizza 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 IGG and Dominos Pizza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGG Inc and Dominos Pizza Group, you can compare the effects of market volatilities on IGG and Dominos Pizza 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 IGG with a short position of Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGG and Dominos Pizza.
Diversification Opportunities for IGG and Dominos Pizza
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IGG and Dominos is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding IGG Inc and Dominos Pizza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza Group and IGG 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 IGG Inc are associated (or correlated) with Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza Group has no effect on the direction of IGG i.e., IGG and Dominos Pizza go up and down completely randomly.
Pair Corralation between IGG and Dominos Pizza
Assuming the 90 days horizon IGG Inc is expected to generate 7.49 times more return on investment than Dominos Pizza. However, IGG is 7.49 times more volatile than Dominos Pizza Group. It trades about 0.05 of its potential returns per unit of risk. Dominos Pizza Group is currently generating about -0.08 per unit of risk. If you would invest 42.00 in IGG Inc on September 1, 2024 and sell it today you would earn a total of 6.00 from holding IGG Inc or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 58.38% |
| Values | Daily Returns |
IGG Inc vs. Dominos Pizza Group
Performance |
| Timeline |
| IGG Inc |
| Dominos Pizza Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IGG and Dominos Pizza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGG and Dominos Pizza
The main advantage of trading using opposite IGG and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGG position performs unexpectedly, Dominos Pizza 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 Dominos Pizza will offset losses from the drop in Dominos Pizza's long position.| IGG vs. CD Projekt SA | IGG vs. Sega Sammy Holdings | IGG vs. Playtika Holding Corp | IGG vs. Square Enix Holdings |
| Dominos Pizza vs. Equinix | Dominos Pizza vs. Perseus Mining Limited | Dominos Pizza vs. Mills Music Trust | Dominos Pizza vs. Tencent Music Entertainment |
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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