Correlation Between Dominos Pizza and Bagger Daves

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

By analyzing existing cross correlation between Dominos Pizza Group and Bagger Daves Burger, you can compare the effects of market volatilities on Dominos Pizza and Bagger Daves 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 Bagger Daves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Bagger Daves.

Diversification Opportunities for Dominos Pizza and Bagger Daves

0.51

Correlation Coefficient

Dominos Pizza  Bagger Daves

Very weak diversification

The 3 months correlation between Dominos and Bagger is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza Group and Bagger Daves Burger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bagger Daves Burger 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 Group are associated (or correlated) with Bagger Daves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bagger Daves Burger has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Bagger Daves go up and down completely randomly.

Pair Corralation between Dominos Pizza and Bagger Daves

If you would invest  6.75  in Bagger Daves Burger on September 5, 2024 and sell it today you would earn a total of  0.05  from holding Bagger Daves Burger or generate 0.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Dominos Pizza Group  vs.  Bagger Daves Burger

Dominos Pizza Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dominos Pizza Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dominos Pizza is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Bagger Daves Burger

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bagger Daves Burger are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Bagger Daves may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dominos Pizza and Bagger Daves

The main advantage of trading using opposite Dominos Pizza and Bagger Daves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, Bagger Daves 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 Bagger Daves will offset losses from the drop in Bagger Daves' long position.

The idea behind Dominos Pizza Group and Bagger Daves Burger 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.