Correlation Between Dogness International and Marine Products

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

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

Diversification Opportunities for Dogness International and Marine Products

0.06

Correlation Coefficient

Dogness International  Marine Products

Significant diversification

The 3 months correlation between Dogness and Marine is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dogness International Corp and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products and Dogness 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 Dogness International Corp are associated (or correlated) with Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Dogness International i.e., Dogness International and Marine Products go up and down completely randomly.

Pair Corralation between Dogness International and Marine Products

Given the investment horizon of 90 days Dogness International Corp is expected to generate 5.55 times more return on investment than Marine Products. However, Dogness International is 5.55 times more volatile than Marine Products. It trades about 0.14 of its potential returns per unit of risk. Marine Products is currently generating about -0.02 per unit of risk. If you would invest  2,675  in Dogness International Corp on September 24, 2024 and sell it today you would earn a total of  2,025  from holding Dogness International Corp or generate 75.7% return on investment over 90 days.

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

Dogness International Corp  vs.  Marine Products

Dogness International

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dogness International Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Dogness International showed solid returns over the last few months and may actually be approaching a breakup point.

Marine Products

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dogness International and Marine Products

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

The idea behind Dogness International Corp and Marine Products 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.