Correlation Between Quhuo and Domo

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

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

Diversification Opportunities for Quhuo and Domo

-0.41

Correlation Coefficient

Quhuo  Domo

Very good diversification

The 3 months correlation between Quhuo and Domo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Quhuo and Domo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domo Inc and Quhuo 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 Quhuo are associated (or correlated) with Domo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domo Inc has no effect on the direction of Quhuo i.e., Quhuo and Domo go up and down completely randomly.

Pair Corralation between Quhuo and Domo

Allowing for the 90-day total investment horizon Quhuo is expected to under-perform the Domo. But the stock apears to be less risky and, when comparing its historical volatility, Quhuo is 1.32 times less risky than Domo. The stock trades about -0.05 of its potential returns per unit of risk. The Domo Inc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  767.00  in Domo Inc on October 24, 2024 and sell it today you would lose (41.00) from holding Domo Inc or give up 5.35% of portfolio value over 90 days.

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

Quhuo  vs.  Domo Inc

Quhuo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quhuo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Domo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Domo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Domo is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Quhuo and Domo

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

The idea behind Quhuo and Domo Inc 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.