Correlation Between WETG Old and Domo

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

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

Diversification Opportunities for WETG Old and Domo

0.0

Correlation Coefficient

WETG Old  Domo

Pay attention - limited upside

The 3 months correlation between WETG and Domo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WETG Old and Domo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domo Inc and WETG Old 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 WETG Old 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 WETG Old i.e., WETG Old and Domo go up and down completely randomly.

Pair Corralation between WETG Old and Domo

If you would invest  722.00  in Domo Inc on December 28, 2024 and sell it today you would earn a total of  74.00  from holding Domo Inc or generate 10.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

WETG Old  vs.  Domo Inc

WETG Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days WETG Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WETG Old is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Domo Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Domo Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Domo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WETG Old and Domo

The main advantage of trading using opposite WETG Old and Domo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WETG Old 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 WETG Old 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.