Correlation Between Doma Holdings and Real Brokerage

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

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

Diversification Opportunities for Doma Holdings and Real Brokerage

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Correlation Coefficient

Doma Holdings  Real Brokerage

Pay attention - limited upside

The 3 months correlation between Doma and Real is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Doma Holdings and Real Brokerage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Brokerage and Doma Holdings 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 Doma Holdings are associated (or correlated) with Real Brokerage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Brokerage has no effect on the direction of Doma Holdings i.e., Doma Holdings and Real Brokerage go up and down completely randomly.

Pair Corralation between Doma Holdings and Real Brokerage

Given the investment horizon of 90 days Doma Holdings is expected to generate 0.17 times more return on investment than Real Brokerage. However, Doma Holdings is 5.98 times less risky than Real Brokerage. It trades about 0.15 of its potential returns per unit of risk. Real Brokerage is currently generating about -0.01 per unit of risk. If you would invest  599.00  in Doma Holdings on October 7, 2024 and sell it today you would earn a total of  29.00  from holding Doma Holdings or generate 4.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	46.03%
Values	Daily Returns

Doma Holdings  vs.  Real Brokerage

Doma Holdings

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Doma Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Doma Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Real Brokerage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Brokerage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Doma Holdings and Real Brokerage

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

The idea behind Doma Holdings and Real Brokerage 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.