Correlation Between U Power and Dominos Pizza
Can any of the company-specific risk be diversified away by investing in both U Power 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 U Power and Dominos Pizza into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Power Limited and Dominos Pizza, you can compare the effects of market volatilities on U Power 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 U Power with a short position of Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Dominos Pizza.
Diversification Opportunities for U Power and Dominos Pizza
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between UCAR and Dominos is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Dominos Pizza in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza and U Power 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 U Power Limited 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 has no effect on the direction of U Power i.e., U Power and Dominos Pizza go up and down completely randomly.
Pair Corralation between U Power and Dominos Pizza
Given the investment horizon of 90 days U Power Limited is expected to under-perform the Dominos Pizza. In addition to that, U Power is 2.59 times more volatile than Dominos Pizza. It trades about -0.21 of its total potential returns per unit of risk. Dominos Pizza is currently generating about 0.22 per unit of volatility. 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 |
U Power Limited vs. Dominos Pizza
Performance |
| Timeline |
| U Power Limited |
| Dominos Pizza |
U Power and Dominos Pizza Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Dominos Pizza
The main advantage of trading using opposite U Power and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power 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.| U Power vs. Sonic Automotive | U Power vs. Lithia Motors | U Power vs. AutoNation | U Power vs. Penske Automotive Group |
| Dominos Pizza vs. Hyatt Hotels | Dominos Pizza vs. Smart Share Global | Dominos Pizza vs. Sweetgreen | Dominos Pizza vs. Wyndham Hotels Resorts |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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