Correlation Between NanoTech Gaming and Dominos Pizza

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

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

Diversification Opportunities for NanoTech Gaming and Dominos Pizza

0.0

Correlation Coefficient

NanoTech Gaming  Dominos Pizza

Pay attention - limited upside

The 3 months correlation between NanoTech and Dominos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NanoTech Gaming and Dominos Pizza Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza Common and NanoTech Gaming 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 NanoTech Gaming are associated (or correlated) with Dominos 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 Common has no effect on the direction of NanoTech Gaming i.e., NanoTech Gaming and Dominos Pizza go up and down completely randomly.

Pair Corralation between NanoTech Gaming and Dominos Pizza

Given the investment horizon of 90 days NanoTech Gaming is expected to generate 24.74 times more return on investment than Dominos Pizza. However, NanoTech Gaming is 24.74 times more volatile than Dominos Pizza Common. It trades about 0.04 of its potential returns per unit of risk. Dominos Pizza Common is currently generating about 0.03 per unit of risk. If you would invest  0.02  in NanoTech Gaming on October 27, 2024 and sell it today you would lose (0.01) from holding NanoTech Gaming or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

NanoTech Gaming  vs.  Dominos Pizza Common

NanoTech Gaming

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NanoTech Gaming has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, NanoTech Gaming is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Dominos Pizza Common

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dominos Pizza Common are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Dominos Pizza is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NanoTech Gaming and Dominos Pizza

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

The idea behind NanoTech Gaming and Dominos Pizza 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.