Correlation Between Dominos Pizza and Femasys

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

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

Diversification Opportunities for Dominos Pizza and Femasys

0.71

Correlation Coefficient

Dominos Pizza  Femasys

Poor diversification

The 3 months correlation between Dominos and Femasys is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza Common and Femasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Femasys and Dominos Pizza 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 Dominos Pizza Common are associated (or correlated) with Femasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Femasys has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Femasys go up and down completely randomly.

Pair Corralation between Dominos Pizza and Femasys

Considering the 90-day investment horizon Dominos Pizza is expected to generate 4.86 times less return on investment than Femasys. But when comparing it to its historical volatility, Dominos Pizza Common is 2.06 times less risky than Femasys. It trades about 0.06 of its potential returns per unit of risk. Femasys is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  115.00  in Femasys on December 26, 2024 and sell it today you would earn a total of  45.00  from holding Femasys or generate 39.13% return on investment over 90 days.

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

Dominos Pizza Common  vs.  Femasys

Dominos Pizza Common

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dominos Pizza Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Dominos Pizza may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Femasys

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Femasys are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Femasys showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dominos Pizza and Femasys

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

The idea behind Dominos Pizza Common and Femasys 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.