Correlation Between United Parks and Dominos Pizza

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

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

Diversification Opportunities for United Parks and Dominos Pizza

-0.31

Correlation Coefficient

United Parks  Dominos Pizza

Very good diversification

The 3 months correlation between United and Dominos is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding United Parks Resorts 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 United Parks 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 United Parks Resorts 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 United Parks i.e., United Parks and Dominos Pizza go up and down completely randomly.

Pair Corralation between United Parks and Dominos Pizza

Given the investment horizon of 90 days United Parks Resorts is expected to under-perform the Dominos Pizza. In addition to that, United Parks is 1.29 times more volatile than Dominos Pizza Common. It trades about -0.12 of its total potential returns per unit of risk. Dominos Pizza Common is currently generating about -0.03 per unit of volatility. If you would invest  47,559  in Dominos Pizza Common on December 20, 2024 and sell it today you would lose (954.00) from holding Dominos Pizza Common or give up 2.01% of portfolio value over 90 days.

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

United Parks Resorts  vs.  Dominos Pizza Common

United Parks Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Parks Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 6 (%) 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.

Pair Trading with United Parks and Dominos Pizza

The main advantage of trading using opposite United Parks and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parks 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 United Parks Resorts 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.