Correlation Between Dogness International and YETI Holdings

Can any of the company-specific risk be diversified away by investing in both Dogness International and YETI Holdings 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 Dogness International and YETI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dogness International Corp and YETI Holdings, you can compare the effects of market volatilities on Dogness International and YETI Holdings 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 Dogness International with a short position of YETI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dogness International and YETI Holdings.

Diversification Opportunities for Dogness International and YETI Holdings

-0.2

Correlation Coefficient

Dogness International  YETI Holdings

Good diversification

The 3 months correlation between Dogness and YETI is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Dogness International Corp and YETI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YETI Holdings and Dogness International 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 Dogness International Corp are associated (or correlated) with YETI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YETI Holdings has no effect on the direction of Dogness International i.e., Dogness International and YETI Holdings go up and down completely randomly.

Pair Corralation between Dogness International and YETI Holdings

Given the investment horizon of 90 days Dogness International Corp is expected to generate 3.96 times more return on investment than YETI Holdings. However, Dogness International is 3.96 times more volatile than YETI Holdings. It trades about 0.06 of its potential returns per unit of risk. YETI Holdings is currently generating about -0.06 per unit of risk. If you would invest  4,512  in Dogness International Corp on September 24, 2024 and sell it today you would earn a total of  188.00  from holding Dogness International Corp or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dogness International Corp  vs.  YETI Holdings

Dogness International

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dogness International Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Dogness International showed solid returns over the last few months and may actually be approaching a breakup point.

YETI Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YETI Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, YETI Holdings is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Dogness International and YETI Holdings

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

The idea behind Dogness International Corp and YETI Holdings 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.