Correlation Between Eastinco Mining and Dominos Pizza

Can any of the company-specific risk be diversified away by investing in both Eastinco Mining 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 Eastinco Mining and Dominos Pizza into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eastinco Mining Exploration and Dominos Pizza Group, you can compare the effects of market volatilities on Eastinco Mining 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 Eastinco Mining with a short position of Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Dominos Pizza.

Diversification Opportunities for Eastinco Mining and Dominos Pizza

-0.14

Correlation Coefficient

Eastinco Mining  Dominos Pizza

Good diversification

The 3 months correlation between Eastinco and Dominos is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration 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 Eastinco Mining 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 Eastinco Mining Exploration 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 Eastinco Mining i.e., Eastinco Mining and Dominos Pizza go up and down completely randomly.

Pair Corralation between Eastinco Mining and Dominos Pizza

Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 155.5 times more return on investment than Dominos Pizza. However, Eastinco Mining is 155.5 times more volatile than Dominos Pizza Group. It trades about 0.27 of its potential returns per unit of risk. Dominos Pizza Group is currently generating about -0.03 per unit of risk. If you would invest  0.85  in Eastinco Mining Exploration on October 5, 2024 and sell it today you would earn a total of  4,699  from holding Eastinco Mining Exploration or generate 552841.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.0%
Values	Daily Returns

Eastinco Mining Exploration  vs.  Dominos Pizza Group

Eastinco Mining Expl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastinco Mining Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Dominos Pizza Group

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Dominos Pizza Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Dominos Pizza is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eastinco Mining and Dominos Pizza

The main advantage of trading using opposite Eastinco Mining and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining 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.

The idea behind Eastinco Mining Exploration and Dominos Pizza Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.