Correlation Between Dominos Pizza and 26442EAG5

Can any of the company-specific risk be diversified away by investing in both Dominos Pizza and 26442EAG5 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 26442EAG5 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 DUKE ENERGY OHIO, you can compare the effects of market volatilities on Dominos Pizza and 26442EAG5 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 26442EAG5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dominos Pizza and 26442EAG5.

Diversification Opportunities for Dominos Pizza and 26442EAG5

-0.62

Correlation Coefficient

Dominos Pizza  26442EAG5

Excellent diversification

The 3 months correlation between Dominos and 26442EAG5 is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza Common and DUKE ENERGY OHIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY OHIO 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 26442EAG5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY OHIO has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and 26442EAG5 go up and down completely randomly.

Pair Corralation between Dominos Pizza and 26442EAG5

Considering the 90-day investment horizon Dominos Pizza is expected to generate 1.44 times less return on investment than 26442EAG5. In addition to that, Dominos Pizza is 1.5 times more volatile than DUKE ENERGY OHIO. It trades about 0.07 of its total potential returns per unit of risk. DUKE ENERGY OHIO is currently generating about 0.16 per unit of volatility. If you would invest  7,976  in DUKE ENERGY OHIO on December 25, 2024 and sell it today you would earn a total of  772.00  from holding DUKE ENERGY OHIO or generate 9.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	72.88%
Values	Daily Returns

Dominos Pizza Common  vs.  DUKE ENERGY OHIO

Dominos Pizza Common

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dominos Pizza Common are ranked lower than 5 (%) 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.

DUKE ENERGY OHIO

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY OHIO are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, 26442EAG5 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dominos Pizza and 26442EAG5

The main advantage of trading using opposite Dominos Pizza and 26442EAG5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dominos Pizza position performs unexpectedly, 26442EAG5 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 26442EAG5 will offset losses from the drop in 26442EAG5's long position.

The idea behind Dominos Pizza Common and DUKE ENERGY OHIO 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.