Correlation Between Domini International and Cornerstone Advisors

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

By analyzing existing cross correlation between Domini International Opportunities and Cornerstone Advisors Real, you can compare the effects of market volatilities on Domini International and Cornerstone Advisors 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 Domini International with a short position of Cornerstone Advisors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Domini International and Cornerstone Advisors.

Diversification Opportunities for Domini International and Cornerstone Advisors

0.01

Correlation Coefficient

Domini International  Cornerstone Advisors

Significant diversification

The 3 months correlation between Domini and Cornerstone is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Domini International Opportuni and Cornerstone Advisors Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Advisors Real and Domini International 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 Domini International Opportunities are associated (or correlated) with Cornerstone Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Advisors Real has no effect on the direction of Domini International i.e., Domini International and Cornerstone Advisors go up and down completely randomly.

Pair Corralation between Domini International and Cornerstone Advisors

Assuming the 90 days horizon Domini International Opportunities is expected to generate 0.46 times more return on investment than Cornerstone Advisors. However, Domini International Opportunities is 2.16 times less risky than Cornerstone Advisors. It trades about 0.14 of its potential returns per unit of risk. Cornerstone Advisors Real is currently generating about -0.04 per unit of risk. If you would invest  1,043  in Domini International Opportunities on December 30, 2024 and sell it today you would earn a total of  45.00  from holding Domini International Opportunities or generate 4.31% return on investment over 90 days.

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

Domini International Opportuni  vs.  Cornerstone Advisors Real

Domini International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Domini International Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Domini International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cornerstone Advisors Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cornerstone Advisors Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Cornerstone Advisors is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Domini International and Cornerstone Advisors

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

The idea behind Domini International Opportunities and Cornerstone Advisors Real 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.