Correlation Between Domo and Smartsheet

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

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

Diversification Opportunities for Domo and Smartsheet

0.0

Correlation Coefficient

Domo  Smartsheet

Pay attention - limited upside

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

Pair Corralation between Domo and Smartsheet

If you would invest  722.00  in Domo Inc on December 29, 2024 and sell it today you would earn a total of  74.00  from holding Domo Inc or generate 10.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Domo Inc  vs.  Smartsheet

Domo Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Domo Inc are ranked lower than 4 (%) 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.

Smartsheet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smartsheet has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Smartsheet is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Domo and Smartsheet

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

The idea behind Domo Inc and Smartsheet 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.