Correlation Between Dominos Pizza and Gan

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

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

Diversification Opportunities for Dominos Pizza and Gan

0.5

Correlation Coefficient

Dominos Pizza  Gan

Very weak diversification

The 3 months correlation between Dominos and Gan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dominos Pizza and Gan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gan and Dominos Pizza 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 Dominos Pizza are associated (or correlated) with Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gan has no effect on the direction of Dominos Pizza i.e., Dominos Pizza and Gan go up and down completely randomly.

Pair Corralation between Dominos Pizza and Gan

Considering the 90-day investment horizon Dominos Pizza is expected to generate 1.23 times less return on investment than Gan. In addition to that, Dominos Pizza is 1.9 times more volatile than Gan. It trades about 0.02 of its total potential returns per unit of risk. Gan is currently generating about 0.05 per unit of volatility. If you would invest  178.00  in Gan on September 23, 2024 and sell it today you would earn a total of  5.00  from holding Gan or generate 2.81% return on investment over 90 days.

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

Dominos Pizza  vs.  Gan

Dominos Pizza

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dominos Pizza are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Dominos Pizza is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Gan

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gan are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Gan is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Dominos Pizza and Gan

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

The idea behind Dominos Pizza and Gan 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..