Correlation Between Dominos Pizza and Interactive Strength

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Can any of the company-specific risk be diversified away by investing in both Dominos Pizza and Interactive Strength 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 Interactive Strength 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 Interactive Strength Common, you can compare the effects of market volatilities on Dominos Pizza and Interactive Strength 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 Interactive Strength. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and Interactive Strength.

Diversification Opportunities for Dominos Pizza and Interactive Strength

DominosInteractiveDiversified AwayDominosInteractiveDiversified Away100%
-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Dominos and Interactive is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza Common and Interactive Strength Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Strength 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 Interactive Strength. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Strength has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Interactive Strength go up and down completely randomly.

Pair Corralation between Dominos Pizza and Interactive Strength

Considering the 90-day investment horizon Dominos Pizza Common is expected to generate 0.26 times more return on investment than Interactive Strength. However, Dominos Pizza Common is 3.88 times less risky than Interactive Strength. It trades about 0.09 of its potential returns per unit of risk. Interactive Strength Common is currently generating about -0.21 per unit of risk. If you would invest  43,754  in Dominos Pizza Common on November 20, 2024 and sell it today you would earn a total of  3,912  from holding Dominos Pizza Common or generate 8.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dominos Pizza Common  vs.  Interactive Strength Common

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -70-60-50-40-30-20-100
JavaScript chart by amCharts 3.21.15DPZ TRNR
       Timeline  
Dominos Pizza Common 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dominos Pizza Common are ranked lower than 7 (%) 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 March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb400410420430440450460470480
Interactive Strength 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Interactive Strength Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.522.533.54

Dominos Pizza and Interactive Strength Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.74-4.3-2.86-1.440.01.452.924.45.87 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15DPZ TRNR
       Returns  

Pair Trading with Dominos Pizza and Interactive Strength

The main advantage of trading using opposite Dominos Pizza and Interactive Strength positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, Interactive Strength 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 Interactive Strength will offset losses from the drop in Interactive Strength's long position.
The idea behind Dominos Pizza Common and Interactive Strength Common 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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