Correlation Between Dominari Holdings and VTv Therapeutics

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

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

Diversification Opportunities for Dominari Holdings and VTv Therapeutics

-0.39

Correlation Coefficient

Dominari Holdings  VTv Therapeutics

Very good diversification

The 3 months correlation between Dominari and VTv is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dominari Holdings and vTv Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on vTv Therapeutics and Dominari Holdings 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 Dominari Holdings are associated (or correlated) with VTv Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of vTv Therapeutics has no effect on the direction of Dominari Holdings i.e., Dominari Holdings and VTv Therapeutics go up and down completely randomly.

Pair Corralation between Dominari Holdings and VTv Therapeutics

Given the investment horizon of 90 days Dominari Holdings is expected to under-perform the VTv Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Dominari Holdings is 1.94 times less risky than VTv Therapeutics. The stock trades about -0.02 of its potential returns per unit of risk. The vTv Therapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,920  in vTv Therapeutics on September 4, 2024 and sell it today you would lose (1,357) from holding vTv Therapeutics or give up 46.47% of portfolio value over 90 days.

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

Dominari Holdings  vs.  vTv Therapeutics

Dominari Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dominari Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Dominari Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

vTv Therapeutics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in vTv Therapeutics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, VTv Therapeutics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dominari Holdings and VTv Therapeutics

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

The idea behind Dominari Holdings and vTv Therapeutics 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.