Correlation Between Everspin Technologies and Domino’s Pizza

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

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

Diversification Opportunities for Everspin Technologies and Domino’s Pizza

-0.13

Correlation Coefficient

Everspin Technologies  Domino’s Pizza

Good diversification

The 3 months correlation between Everspin and Domino’s is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies and Dominos Pizza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza Group and Everspin Technologies 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 Everspin Technologies are associated (or correlated) with Domino’s Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza Group has no effect on the direction of Everspin Technologies i.e., Everspin Technologies and Domino’s Pizza go up and down completely randomly.

Pair Corralation between Everspin Technologies and Domino’s Pizza

Given the investment horizon of 90 days Everspin Technologies is expected to under-perform the Domino’s Pizza. In addition to that, Everspin Technologies is 1.36 times more volatile than Dominos Pizza Group. It trades about -0.16 of its total potential returns per unit of risk. Dominos Pizza Group is currently generating about -0.04 per unit of volatility. If you would invest  795.00  in Dominos Pizza Group on December 26, 2024 and sell it today you would lose (40.00) from holding Dominos Pizza Group or give up 5.03% of portfolio value over 90 days.

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

Everspin Technologies  vs.  Dominos Pizza Group

Everspin Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everspin Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Dominos Pizza Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dominos Pizza Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Domino’s Pizza is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Everspin Technologies and Domino’s Pizza

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

The idea behind Everspin Technologies and Dominos Pizza Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.