Correlation Between Ihuman and Dominos Pizza

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

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

Diversification Opportunities for Ihuman and Dominos Pizza

0.14

Correlation Coefficient

Ihuman  Dominos Pizza

Average diversification

The 3 months correlation between Ihuman and Dominos is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Dominos Pizza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza Group and Ihuman 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 Ihuman Inc are associated (or correlated) with Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza Group has no effect on the direction of Ihuman i.e., Ihuman and Dominos Pizza go up and down completely randomly.

Pair Corralation between Ihuman and Dominos Pizza

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 11.45 times more return on investment than Dominos Pizza. However, Ihuman is 11.45 times more volatile than Dominos Pizza Group. It trades about -0.01 of its potential returns per unit of risk. Dominos Pizza Group is currently generating about -0.16 per unit of risk. If you would invest  194.00  in Ihuman Inc on September 14, 2024 and sell it today you would lose (18.00) from holding Ihuman Inc or give up 9.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	32.54%
Values	Daily Returns

Ihuman Inc  vs.  Dominos Pizza Group

Ihuman Inc

Risk-Adjusted Performance

4 of 100

Insignificant

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

Dominos Pizza Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Ihuman and Dominos Pizza

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

The idea behind Ihuman Inc and Dominos Pizza Group 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .