Correlation Between Domo and Ke Holdings

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

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

Diversification Opportunities for Domo and Ke Holdings

0.35

Correlation Coefficient

Domo  Ke Holdings

Weak diversification

The 3 months correlation between Domo and BEKE is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Domo Inc and Ke Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ke Holdings and Domo 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 Domo Inc are associated (or correlated) with Ke Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ke Holdings has no effect on the direction of Domo i.e., Domo and Ke Holdings go up and down completely randomly.

Pair Corralation between Domo and Ke Holdings

Given the investment horizon of 90 days Domo Inc is expected to generate 1.01 times more return on investment than Ke Holdings. However, Domo is 1.01 times more volatile than Ke Holdings. It trades about 0.1 of its potential returns per unit of risk. Ke Holdings is currently generating about 0.06 per unit of risk. If you would invest  737.00  in Domo Inc on December 27, 2024 and sell it today you would earn a total of  144.00  from holding Domo Inc or generate 19.54% return on investment over 90 days.

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

Domo Inc  vs.  Ke Holdings

Domo Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Domo Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Domo displayed solid returns over the last few months and may actually be approaching a breakup point.

Ke Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ke Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent forward-looking signals, Ke Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Domo and Ke Holdings

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

The idea behind Domo Inc and Ke 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.