Correlation Between Roblox Corp and Dominos Pizza

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

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

Diversification Opportunities for Roblox Corp and Dominos Pizza

0.36

Correlation Coefficient

Roblox Corp  Dominos Pizza

Weak diversification

The 3 months correlation between Roblox and Dominos is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Roblox Corp 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 Roblox Corp 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 Roblox Corp 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 Roblox Corp i.e., Roblox Corp and Dominos Pizza go up and down completely randomly.

Pair Corralation between Roblox Corp and Dominos Pizza

Given the investment horizon of 90 days Roblox Corp is expected to generate 0.98 times more return on investment than Dominos Pizza. However, Roblox Corp is 1.02 times less risky than Dominos Pizza. It trades about 0.11 of its potential returns per unit of risk. Dominos Pizza Common is currently generating about -0.28 per unit of risk. If you would invest  5,989  in Roblox Corp on October 12, 2024 and sell it today you would earn a total of  216.00  from holding Roblox Corp or generate 3.61% return on investment over 90 days.

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

Roblox Corp  vs.  Dominos Pizza Common

Roblox Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Roblox Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Roblox Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Dominos Pizza Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dominos Pizza Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Dominos Pizza is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Roblox Corp and Dominos Pizza

The main advantage of trading using opposite Roblox Corp and Dominos Pizza positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roblox Corp 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 Roblox Corp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.