Correlation Between Domo and Lytus Technologies

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

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

Diversification Opportunities for Domo and Lytus Technologies

-0.47

Correlation Coefficient

Domo  Lytus Technologies

Very good diversification

The 3 months correlation between Domo and Lytus is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Domo Inc and Lytus Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lytus Technologies and Domo 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 Domo Inc are associated (or correlated) with Lytus Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lytus Technologies has no effect on the direction of Domo i.e., Domo and Lytus Technologies go up and down completely randomly.

Pair Corralation between Domo and Lytus Technologies

Given the investment horizon of 90 days Domo Inc is expected to generate 0.59 times more return on investment than Lytus Technologies. However, Domo Inc is 1.68 times less risky than Lytus Technologies. It trades about 0.14 of its potential returns per unit of risk. Lytus Technologies Holdings is currently generating about -0.02 per unit of risk. If you would invest  754.00  in Domo Inc on September 3, 2024 and sell it today you would earn a total of  182.00  from holding Domo Inc or generate 24.14% return on investment over 90 days.

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

Domo Inc  vs.  Lytus Technologies Holdings

Domo Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Domo Inc are ranked lower than 10 (%) 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.

Lytus Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lytus Technologies Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Domo and Lytus Technologies

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

The idea behind Domo Inc and Lytus Technologies Holdings 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.