Correlation Between Dominari Holdings and Vericel Corp

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

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

Diversification Opportunities for Dominari Holdings and Vericel Corp

-0.74

Correlation Coefficient

Dominari Holdings  Vericel Corp

Pay attention - limited upside

The 3 months correlation between Dominari and Vericel is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dominari Holdings and Vericel Corp Ord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vericel Corp Ord and Dominari 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 Dominari Holdings are associated (or correlated) with Vericel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vericel Corp Ord has no effect on the direction of Dominari Holdings i.e., Dominari Holdings and Vericel Corp go up and down completely randomly.

Pair Corralation between Dominari Holdings and Vericel Corp

Given the investment horizon of 90 days Dominari Holdings is expected to under-perform the Vericel Corp. In addition to that, Dominari Holdings is 1.31 times more volatile than Vericel Corp Ord. It trades about -0.05 of its total potential returns per unit of risk. Vericel Corp Ord is currently generating about 0.16 per unit of volatility. If you would invest  4,427  in Vericel Corp Ord on September 12, 2024 and sell it today you would earn a total of  1,375  from holding Vericel Corp Ord or generate 31.06% return on investment over 90 days.

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

Dominari Holdings  vs.  Vericel Corp Ord

Dominari Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dominari Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Vericel Corp Ord

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vericel Corp Ord are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Vericel Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dominari Holdings and Vericel Corp

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

The idea behind Dominari Holdings and Vericel Corp Ord 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 Transaction History module to view history of all your transactions and understand their impact on performance.